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.
