Domain: Lower migration “a major contributor to falling property prices”

For years we witnessed “experts” try to gaslight the population into believing that the epic boom in house prices in Sydney and Melbourne was not driven, to a large extent, by mass immigration.

Now that immigration is projected to fall, these same experts are afraid that it will crash the housing market.

The latest dose of reality comes from Domain economist, Trent Wiltshire, who warns that “lower population growth will be a major contributor to falling property prices”:

Australia’s population growth has been driven by immigration throughout most of its recent history, but particularly in the past 15 years…

COVID-19 will likely cause Australian population growth to slow to the lowest rate since at least the Second World War and possibly the Great Depression. The decline in immigration will be the key driver of the decline in population growth…

Lower immigration means reduced demand for property, which will put downward pressure on prices…

The impact of lower NOM won’t be felt evenly across the country as NSW and Victoria attract the most migrants by a significant margin…

So it’s possible that Sydney and Melbourne will be hit hardest by the reduction in migrants, which would mean a larger fall in property prices in Australia’s two largest cities.

Australia’s extreme house prices – especially in the migrant hotspots of Sydney and Melbourne –  has locked out nearly an entire generation from ever owning a home and has consigned the rest to a lifetime of mortgage slavery.

Removing one of the key demand drivers – population growth – would significantly improve the housing affordability situation. It would also mean fewer people being forced to live in shoe box apartments.

Lower immigration is exactly what the economy needs and should be treated with joy, not panic.

Leith van Onselen

Comments

    • Yes. It would be an ill wind (breath) from the Chinese if it did no good at all.

      So here are 10 excellent things ✔️about the 🇨🇳ChinaVirus🦠 (to the property housing topic)

      1. Kills off old people (below) releasing their wealth, housing and assets to younger generations. Also reduces the pension / welfare / health care & NDIS future burden on future generations. 
       
      2.  Has rapidly ‘Re-nationalised’ our economy, in food, manufacturing & industry need for independence.  End of globalisation, and the race to the bottom in Australian wages being the same as bangladesh. 
       
      3. Has irrevocably changed public & now government sentiment on the socialist left & migrant lobby ‘big Australia’ & ‘open borders’. 
       
      4. Has irrevocably changed public sentiment to be anti China, rolling back decades of Australia society weakness in becoming a Chinese colony.  
       
      5. Force expels over 2.1 million unwanted third world migrants, Indian, North & South Asian, Nepalese, Bangladeshi, Middle Eastern on pretext temporary visas.

      When the Senate passed the $130 billion job keeper package, the real debate was the ‘boundary of entitlement’.
      And it’s Australian citizens only, PR & NZ Scv (444),,.  and NO support for the 2.1 million TR despite the Labor party protestations. 
      The migrant guestworkers can partially or fully withdraw their super (see below) albeit low balances but that will devastate the Rest & Hostplus industry funds, esp when over a 1 million plus TR take out their full balance as they are force exited in visa cancellation/ exiting Australia.
      Mathias Corman re the Migrant Guestworkers on a pretext student or skilled visa… “Can’t support themselves”
      => Mathias “get your super out” & “Go home”.
       
      So you understand the housing implications.
       
      That’s 1 million TR third world unskilled migrants in just Sydney alone to be exited – over 200,000 ex Australian dwellings occupied by the migrant TR influx in their Sydney ghettos able to be reclaimed by Australians (once disinfected). Gone.

      About 800,000 TR in Melbourne in Melbourne. Gone.
       
      Lowers housing prices – expect a 40% crash on rental & investor rented accommodation (rent strike, then no more migrants with 4 bunks per fetid little room paying $160 cash in hand week to a Chinese ‘investor’ owner also thieving our taxpayer funded negative gearing). It will crash followed by a similar owner occupied housing price fall. 
       
      => Australian housing affordability restored.
      =>Australian Jobs for Australians 
      =>Onshore migrant guestworker black economy shut down. 
      =>Long term – real wages growth & decreased cost of living – due to this removal of 2.1 million TR migrants on pretext TR visas who stole Australian jobs & housing. 
      => Australia education restored in both affordability and quality as the corrupted foreign student industry is shut down. 

      The era of multiculturalism, open borders and migrant temporary residents ‘rights’ before Australian citizens is now over. 

      All good things for our young people and all Australian citizens. 

      6. Decongests our public spaces & public infrastructure, transport, roads. 
      Right sizes our dams, power grid and civilian infrastructure. 
       
      7. Reduces emissions – less airplanes, traffic & people movement.   The China shutdown in 3 months alone was the equivalent of all of South America & Africa yearly emissions.
       
      8. Restores fuel & energy costs to what they should be (oil $usd 15 barrel – in fact today it’s negative as no storage capacity & record low & gas 4c a Gjoule). Dramatically lowers the cost of living in household expenses, goods & transport & energy costs.
      Restores Australia industrial & manufacturing competitiveness.
       
      9. Exposes the Australian superannuation flawed model and the life industry (life premiums via super are a third of their income) carving out their fees & charges for nothing – as the frauds they are. 
       
      “AustralianSuper chief executive Ian Silk puts the case for possible Australian Reserve Bank liquidity support for the Industry Super Funds pointing to the fact that the financial system is now in unchartered territory. He says if the Treasury’s estimate of a $27 billion drawdown of super savings by millions of Australians proves accurate, the industry will survive with no major liquidity issues.  

      But if Treasury is wrong and the figure is more like the $40 billion to $50 billion estimated by actuaries Rice Warner Silk, there will almost certainly be systemic fund failure in need of emergency liquidity”
       
      Expect up to 6 million withdrawals including now at least 1.5 million or more TR albeit low balances, but able to fully cash out as THEY HAVE to exit Australia. 

      6 million x $20k each = $120 billion. By year end.
      👉🏻  3 x their worst case estimate. 

      Australian super is $3 trillion but is roughly split in industry, retail, DYI & corporate.

      Industry Super funds are only $700 billion and only a fraction or $105 billion in cash or easily liquidity. Industry funds also have a massive concentration of lower skill with mass unemployment plus the TR low skill. The industry funds will go to the RBA for liquidity funding (A super fund can’t  ‘borrow’, it can only get a loan for 90 days until it makes good it’s member contribution) and probably get refused so these industry funds will be forced to crystalise losses, drag down the equity market & be forced to sell off all that overvalued unlisted ‘property’ investment (rent strike / depopulated) commercial property at fire sale prices… 
       
      The Australian Government-business collusion in the super pension tax (Mandated super) so future governments could deny their pension obligation to the elderly.. that’s finished. 
       
      10. Anti migrant community attitude.

      Many of the new Australian unemployed (it will be over 2.5 million new unemployed to a total of 4 million unemployed and another 2 million plus seeking work) unemployed. Business have used the ChinaVirus as an excuse to sack staff, or now they are replacing TR staff (no jobkeeper subsidy) with an Australian PR or citizen – where the Australian government pays their wages…

      And then jobkeeper runs out.
      And it’s November and it’s still 2-3 million Australians unemployed..
      That will build up to seething mass community sentiment (because of the TR migrant job and housing theft) to see ALL TR migrants force exited, and a complete shutdown of PR and new intake migrants.

       Observations
       
      ▫️ChinaVirus infects across the board.
      No vaccine or preventive cure.
      It’s a common cold with SARS added.
      Kills the old, weak and medically impaired and weakens the middle aged and others.
      No persistent resistance to stop reinfection.

      Border control & migrant intake.
      The ChinaVirus will establish itself in third world countries like India, Nepal, South East Asia, China, the Middle East and Africa – so without a vaccine or preventive cure and ‘open borders’ – it will just keep coming back into Australia..

      Which means restrictions on all migrants, especially TR & visitors will be ongoing for years.
       
      Deaths. 
      Kills off old people – mostly men over 60 with pre-existing health issues & then a good chunk of over 70’s.  
      And weakens the rest it infects to kill them off next time.
      Once established in the human population it will act as an ongoing culling mechanism as people get older & weaker.
       
      We have 2.5 million aged over 70 in Australia
      and another 1.3 million on NDIS etc with serious pre-existing health issues. 3.8 million at 3% death rates (long term – this will go on forever) that’s 120,000 dead.

      Most of those aged people in their own fully owned homes and also sucking up pensions or benefits. 
       
      Say 120,000 dead at say $450,000 net asset each including housing – is a $49 billion of accelerated wealth Xfer plus the ongoing yearly reduction of $4 billion plus in aged care or health/NDIS outlays.

      Plus all that housing also released back onto the market – adding to capacity and lowering prices & rents.

  1. Arthur Schopenhauer

    The town house complex under construction down the street in leafy NE Melbourne has just fallen silent. On Friday and Monday it was a hive of activity. The roof is on, the building paper is up, the downpipes have been connected and now silence. Magpies, Lorikeets and Wattle Birds are all that can be heard.

  2. Ukraine fnMEMBER

    The truth always comes out in the end when all the damage has been done. I look forward to the crush loading hiatus and ponzi collapse.

  3. adelaide_economistMEMBER

    Remember when it was rac!st to say migration was driving house prices up when prices were going up, but now there’s a good chance they will go down it’s pro-vibrancy to say migration drives prices up? Yeah, gotta love the principled and credible mainstream media.

  4. I must say it gets annoying reading articles where they refer to Working Holiday Makers and Overseas Students as migrants.
    I did working holidays in the UK and Canada and knew when my time was up I had to go, I was in Toronto on 9/11 thinking should I head back to OZ.

    • adelaide_economistMEMBER

      Yeah but we’re all ‘global citizens’ now. You have the right (moral if not legal) to go wherever you want, whenever you want and to demand that the country you are temporarily residing in gives you full access for free and indefinitely to every social program of the people who live there. If you want to stay, develop a sour attitude towards the people you chose to live with and then bring your grandparents and extended family over, then all the better.

      • Don’t forget about conducting mass casualty terror attacks in your newly adopted home where you like to live because of all the gimmes, but that is full of awful people who don’t believe in your particular sky-fairy and who must therefore be blown up or have their heads relocated.

        Don’t forget that.

    • Agree, whilee suggesting the same are buying up property without any clear evidence, but follows MB’s editorial line dog whistling ‘immigration’ and ‘population growth’ suggesting the ‘great replacement theory’ while not demanding any environmental policy nor constraints on corporates, including fossil fuels.

      Fact is there has been too much easy and cheap credit for too many ignorant Australians lapping up the RE PR and myths on property….. pushing prices to the limit.

      • FEED ME SEYMOUR

        If you own property other then oo you are dumb as dirt you had 3 clear years to get out

  5. What, the Chinese don’t drive up house prices do they ??? I don’t recall ever seeing that in Domain.

  6. But Greg Jericho said immigration has no effect on prices? He and the offended brigade must be right. Literally everyone else, including landlords and agents, must be wrong…!

    • SnappedUpSavvyMEMBER

      Scummo, Jericho, Pascoe, Irvine and many more all had a good old time gas lighting Australians

      • Yeah – but it works out in the end right. All these losers have no other skill set. Going forward, actually being useful will be what puts food on the table.

        They will loose everything they thought was valuable. Its really funny if you think about it. And they don’t have any chance at finding happiness anymore.

        See if you are a middle aged childless woman with no options, man that has got to suck. Get to look forward to 40 years poor, alone and dis-empowered. Why? Because you gave the system your loyalty and sold out those around you.

        I almost feel sorry for them. You’d be surprised how karma actually works out.

  7. BoomToBustMEMBER

    we need to bring up some of the old articles where they said immigration had no effect on prices. Should be a front page article for MSM.

    • One of the staunchest of the look-over-there brigade was RBA, which put out spurious papers arguing that “zoning restrictions” were driving up Sydney and Melbourne prices.

      Whenever the new, improved, reconstructed, Phil Lowe finally walks away from the fabulous “dynamism” of hyper migration, somebody wake me up and let me know.

      • They were correct. Zoning restrictions combined with high immigration did cause the shortage which supports the high prices.

        A shortage is not caused by a single factor (such as demand) but by a mismatch in supply and demand.

        Reckless immigration + reckless rezoning = cheap housing
        stingy rezoning + stingy immigration = cheap housing
        BUT
        Reckless immigration + stingy rezoning = expensive housing (shortage)

        The shortage of housing is caused by a speed differential between extra people and extra houses – not merely by the extra people.

    • SnappedUpSavvyMEMBER

      I had a whole cache of articles ready for this moment but lost them all – FAAAARRRKKK would have been epic, Pascoe put a lot of them out too

  8. But, but…. what about the Quaranteens that are about to enter this world in nine months’ time?

    • adelaide_economistMEMBER

      Dunno. According to most panic stricken landlords on twitter, if they have to sell, well, that’s one house less that’s available to live in.

      • Yeah, actually, there’s a federal law that states anyone selling against their financial benefit must have the house demolished out of spite.

  9. Flow of credit (mediated by cost of credit) is the major driver of price; immigration is a side show

    • More migrants means more credit. Simple stuff. Also explains why the migrant hotspots of Sydney and Melbourne have become so detached from the rest of Australia (despite same credit availability).

  10. blacktwin997MEMBER

    ‘Domain Research House’ sounds like a sister organisation to The Ponds Institute.

  11. – It seems one LvO never learns or doesn”t want to learn.

    – The US also had (has) high immigration (as high as Australia ???) but in spite of that there was a housing crash in 2005 & 2008.
    – The counter example is Japan. Japan NEVER had high levels of immigration. It had (& still has) actually very low levels of immigration. Yet, it had a housing bubble in the 1980s. How come ? Never heard of a thing called “debt” and “Credit” ?
    – One MAJOR reason the housing market is “falling” is e.g. the reset from “Interest Only” to “Principal & Interest”. (think: debt repayments).
    – Another reason is that banks have become (much) more cautious when it comes to lending.
    – In 1960 the norm was that a house cost about 1.6 times Household income. Or to put it another way: banks were in those days only willing to lend 1.6 times household income for a mortgage. And as time went by that ratio went higher and higher and that was followed by higher (surprise, surprise) property prices. Keep in mind: immigration between say 1960 & 2000 was much lower than today.
    – Again: Credit & Debt.

    – So, this article from Domain is just FEAR MONGERING from the property spruikers.

  12. Dear COVID,

    Thank you.

    I am a six year old girl who wants to thank you for being the only thing that is bringing to a head overpriced property in my country.
    Thank you for caning real estate agents. Thank you for stripping away the proceeds of greed. Thank you for giving people a shake about what is truly important in life.
    I don’t want people to get you, but I want to say you have done more for my generation than any other generation to date regarding bringing on a property bust and bringing this self-centred madness in pseudo national wealth building than any other thing. And ain’t that sad? Thank you for turning away overseas buyers that inflate prices unfairly kicking out our locals and smashing their aspirations.

    Bring
    It
    On

    The future of Australia thanks you for only this thing.