Collapsing immigration will tank Aussie property market

It’s amazing that during Australia’s most recent housing price booms, commentators and policy makers of all colours argued that the prices were not been driven by mass immigration, but rather a lack of supply.

Now that immigration is projected to crash, we have these same commentators claiming that it will put heavy downward pressure on property prices, especially in the migrant hotspots of Sydney and Melbourne:

Over recent months, we’ve seen Domain and CoreLogic warn of a potential property correction on the back of lower immigration.

Now property market players and academics have joined the chorus, claiming that a “lack of migration to Australia due to coronavirus is expected to hit the property market hard”:

Property buyer Rich Harvey specialises in buying property for expat clients.

“When COVID-19 hit, it really hit quite dramatically, we saw our phones go dead the week after the lockdown restrictions were in place. We’d had a pretty good run in February,” he said.

Leading property academics say the property market’s ability to rebound will depend in part on how quickly migration numbers can recover to pre-COVID-19 levels.

“Until population growth recovers to something like pre-COVID levels then it’s going to have a negative impact on the housing market,” Curtin University professor and chair of the Western Australian Housing Industry Forecasting Group Steven Rowley said…

He said the biggest impact will be felt in the major cities like Sydney and Melbourne where the bulk of population growth comes from net overseas migration…

Nigel Stapledon is a research fellow in real estate at the University of New South Wales.

He said Labor’s calls to push migration lower than the pre-COVID-19 levels would have a negative impact on the housing market…

“We are probably going to have two years of migration downturn, but it could bounce back after that. It may be that we get a strong kickback, which would specifically be good for the property market,” he added…

“But how quickly net overseas migration bounces back will impact the recovery,” he said.

Exorbitant property prices in Sydney and Melbourne have prevented nearly an entire generation from owning a home, while consigning the rest to a lifetime of mortgage servitude and shoe-box living.

Therefore, removing mass immigration – a key demand driver – will significantly improve housing affordability, in addition to consign fewer people to live in tiny apartments.

Lower immigration is exactly what the Australian economy needs and should be greeted with joy from commentators and the general public.

Leith van Onselen
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Comments

    • C.M.BurnsMEMBER

      i believe it’s a self certification deal. Start referring to yourself as one and eventually your new property academic peers (who are also all self certified) will accept you into the cult and start calling you a property academic (or PA)

    • darklydrawlMEMBER

      How do I become a “highly paid” leading property academic? <– fixed it for you 😀

    • gballardMEMBER

      They are self certified – and in your case you are very likely to be too intelligent to qualify. Never mind – there are worse occupations (bank economist?!).

      • mild coronaMEMBER

        Rugby League journalist for a Murdoch paper would spell the end for me.

  1. So there is such a thing as a research fellow in real-estate at UNSW? FMD, only in Australia.

  2. DouglasMEMBER

    Leith great work -the ponzi economies are coming undone and maybe the punters and govt planners will have to think of useful things for people to do like import replacement or export.

  3. I am staggered at the number of experts put on News & Current Affairs programs (mainly ABC) that sprout the bullsh!t about immigration. Every one of them without question says high immigration is always good for everyone. That is never going to change in this country. No-one gives a toss if younger people are excluded from access to appropriately priced accommodation. Both Labor & Liberal will open the Immigration floodgates ASAP.

    • Yep, then we hear the opposing message that ABC is a left wing think tank. This message is drummed into our head “cut funding to the left ABC socialists”.
      In fact the ABC does not promote most left wing ideals just the fake ones such a identity politics and fake racism events.

      Affordable housing for the sick, disabled, lower paid workers, young people and old people are 100% core left wing ideals. ABC actually takes a stand against affordable housing.

      • mild coronaMEMBER

        So true. They’re just incredible. Listening to the coverage today… no one even suggests that there are dozens of other ways things could have been done to handle the changes to the economy brought about by the virus.

  4. By the sheerest of coincidences, un-woke Scott and woke Anthony will restart hyper migration just in time, all-time property bubble saved from popping, horrific levels of racism headed off at the pass.

    • Wot? You mean those ‘skilled migrants’ who earn below the median wage, who’s bosses steal back the meagre wages that they are paid, who work 12 hours a day every day, who are employed casually in the gig economy?
      Oh yeah, they will bid up our prices even further coz they have so much money….. The banks will have to relax their responsible lending rules to the point where they’re lending to anything warm that draws breath…AGAIN!!!
      I’m thinking 100% LVR? Wot about 110% LVR? That’ll do it!

  5. SnappedUpSavvyMEMBER

    well, I don’t think immigration from chyna will ever be like it was before, its a tragedy I know

  6. while i don’t really get the right to comment since I’m studying video game design, “leading property academics” is complete bs and shows how warped our economic priorities are.

  7. I am coming to the conclusion based on years of being a bear that NOTHING will dampen the Aussiie property market, it might very well be an exception to laws of science, like gravity and mean reversion, and go to the moon.

    • SoMPLSBoyMEMBER

      Mebbe.
      Super-cooled water in the liquid phase will instantly turn to solid (ice) with a the tiniest of physical disturbances; i.e. a feather dropping.
      Some things defy intuition and logic. So does the Strayan property market ( it seems). The inputs that drove its past behavior ( good or bad) available credit, immigration, shortages, public sentiment etc have changed significantly now yet the momentum of the previous ‘inputs’ remain and will for some set time period.

      ” We are seliing to willing buyers at the current fair market price”
      (In order so that we survive)
      Margin Call top scene ( when the music stops and the game changes- and fast)

      https://www.youtube.com/watch?v=Hhy7JUinlu0

  8. graphicMEMBER

    https://www.wikiwand.com/en/List_of_Ponzi_schemes
    “In the mid-1990s, Albania was transitioning into a liberalized market economy after years under a State-controlled economy reinforced by the cult of personality involving longtime Communist leader Enver Hoxha; the rudimentary financial system became dominated by pyramid schemes, and government officials tacitly endorsed a series of pyramid investment funds. Many Albanians, approximately two-thirds of the population, invested in them. In 1997, Albanians, who had lost $1.2 billion, took their protest to the streets where uncontainable rioting and attacks on government infrastructure led to the toppling of the government and the temporary existence of a stateless society. Although technically a Ponzi Scheme, the Albanian scams were commonly referred to as pyramid schemes both popularly and by the International Monetary Fund.”

    Surely, it couldn’t happen here.

  9. property is doomed and no politician seems to care at all anymore

    they only cared they could be blamed for the crash, but now when there is a great scapegoat … they are happy

    • I like this theory – seems logical. But I would need to see pollies getting rid of their property portfolios before I completely accepted it.

      • mild coronaMEMBER

        The basic rule is a politician would rather lose ten properties than his seat, that’s how gratifying being a pollie is.

      • working class hamMEMBER

        Politicians are far more arrogant than your average land rat. So removed from society that even the law is beneath them.
        Jackie Trad. Wouldn’t be looking at those particular canaries for guidance.

    • Super Phoenix

      Exactly. The coronavirus is a godsend that can conveniently take all blames.

      Lost your investments? – Its coronavirus’s fault!
      Lost your job? – Its coronavirus’s fault!
      Did your marriage break down? – Its coronavirus’s fault!
      Cannot afford to pay for the necessities? – Its coronavirus’s fault!

      I am sure they can find a plausible narrative to blame the coronavirus for the next bushfire, too.

      • “GFC” was used as an ecuse for everything for a solid 5 years after. This will be 10.

  10. As another article suggests, more significant will be unemployment, potentially into the medium term.

    Wait for all the data including private treaty sales, and mortgage deferrals to resume, or fire sales……may not be till Xmas…..

  11. According to the SMH today, ScoMo is planning on bringing as many International students in as possible early next year, and take advantage of closed borders overseas, so i unfortunatley can’t see huge falls happening somehow.