Unit rents soar as immigration rockets back

CoreLogic has released data showing explosive growth in unit rents amid strong arrivals of international students and migrants:

National unit rents continue to surge, up 1.1% in September, compared to a 0.5% rent rise seen across houses…

The annual trend recorded a new record high, with unit rents rising 11.8% over the 12 months to September…

“While the sustained period of rental growth has seen an increasing portion of tenants encounter affordability challenges, given the relative affordability of unit rents compared with house rents, coupled with the strong return of overseas migration and record low rental vacancy rates (1.1% across both the combined capitals and combined regions) we’ll likely see rental growth remain strong for some time yet.”

Tuesday’s federal budget projects 470,000 net overseas migrants to arrive in Australia over the two years to 2023-24:

Yet, these projections look wildly understated given analysis of monthly visa data by Coolabah Capital shows that international student arrivals exceeded pre-pandemic levels in the first half of 2022 and rocketed to 500,000 on an annualised basis in the September quarter, with work visas also accelerating:

The Department of Home Affairs has also ruled on more than two million temporary and permanent visa applications in the last four months. Yet there is still a visa ‘backlog’ of 872,000 because applications continue to pour in, which the government has vowed to clear as quickly as possible.

Based on this partial data alone, Australia could potentially see 500,000 net migrants arrive in Australia next year, with further strong flows in 2024.

Regardless, where will these hundreds of thousands of new migrants live when there is already a chronic shortage of rental homes for the existing population?

The Albanese Government’s mass immigration drive is an inequality disaster in the making.