Australia’s Property Market Experiences Unprecedented Surge Amid Migration Boom - Property Inc

Australia’s Property Market Experiences Unprecedented Surge Amid Migration Boom

In a remarkable turn of events, Australia’s property market is witnessing a significant surge, driven largely by the boom in overseas migration. As detailed in two insightful articles, one by Thierry Ng and another by Elizabeth Redman, the country’s real estate landscape is undergoing a transformation, characterized by increased investor activity and rising property values across numerous regions.

Investor Revival and Migration: Key Drivers of the Boom

Thierry Ng’s article, titled “Australia’s property investment activity soars as investors scuttle to capitalise on overseas migration boom,” highlights the resurgence of investor interest in the real estate market. Raine & Horne, a major real estate firm, reports a 25% spike in open for inspections (OFIs) in October 2023, compared to the previous year. This resurgence is further supported by the Australian Bureau of Statistics data, showing a rise in new investor housing loan commitments.

The executive chairman of Raine & Horne, Angus Raine, emphasized the impact of migration on the market, stating, “Record migration saw an extra 454,4000 people added to Australia’s population in the year to March 2023, and we know that six out of 10 new migrants will rent a home.” Raine also pointed out that despite the Reserve Bank of Australia hiking rates, property investments continue to outperform other asset classes, offering greater stability and less volatility.

Regional Market Performance and Future Outlook

Elizabeth Redman, in her article titled “Property values are now rising in four out five suburbs. Can it last?” notes that property values are rising in four out of five suburbs nationwide, despite the impact of rising interest rates. CoreLogic research backs this, with Sydney and Melbourne showing notable increases in house and unit markets. However, Redman also points out that the pace of growth is slowing in these cities due to affordability issues and borrowing limits.

Eliza Owen, CoreLogic’s head of research, attributes the price rise to the demand-supply imbalance in housing. Owen explains, “Even though there is a lot of pessimism about the state of inflation and weakening economic conditions, there are also a lot of people with the capacity to buy despite higher interest rates.”

Experts Weigh In

Both articles feature insights from various experts, including AMP chief economist Shane Oliver and HSBC chief economist Paul Bloxham. Oliver observes a growing group of buyers less sensitive to interest rates, buoying property prices after last year’s downturn. Bloxham highlights the role of strong population growth in supporting housing demand, particularly in Sydney and Melbourne.

In conclusion, the Australian property market is experiencing a significant upswing, fueled by investor activity and an influx of migrants. While challenges such as rising interest rates and affordability concerns loom, the overall outlook remains positive, with property values continuing their upward trajectory across most regions.

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