CoreLogic’s Tim Lawless believes that the collapse in immigration will hit Melbourne’s and Sydney’s housing markets especially hard:
“Sydney and Melbourne arguably show a higher risk profile relative to other markets due to their large exposure to overseas migration as a source of housing demand, along with greater exposure to the downturn in foreign students, stretched housing affordability and already low rental yields that are likely to reduce further on the back of rising vacancy rates and lower rents”…
“On the demand side, occupancy rates are being negatively impacted by a stalling in overseas student numbers, as well as many domestic students studying remotely, and a stalling in international migration”.
This comes as the ABS this week revealed that Sydney and Melbourne received 63% of Australia’s total net overseas migration of 239,600 in 2018-19:
It’s funny how the property lobby for years argued that Sydney’s and Melbourne’s housing bubbles were being driven by a lack of supply, not excessive immigration (population growth).
Now the truth is being revealed, with the property industry admitting that falling immigration will smash the market.
Extreme house prices in Sydney and Melbourne have stopped nearly an entire generation from owning a home, while consigning the rest to a lifetime of mortgage servitude.
Thus, removing one of the key demand drivers – mass immigration – will significantly improve housing affordability, as well as forcing fewer people to live in tiny apartments.
Lower immigration is exactly what the Australian economy needs and should be greeted with joy.