INDUSTRY NEWSNationalReal Estate News

Australia’s property market buckles as immigration hits a 70-year high

The Australian housing market is being put to the test after a record 765,900 new overseas arrivals landed in the country in the 12 months to September.

The surge in Australia’s population was the highest in 70 years and has contributed to the national vacancy rate sitting at a record low, while new home construction “can’t keep pace”.

In total, 2098 immigrants landed in Australia each day in the year to September 2023, according to the Australian Bureau of Statistics (ABS), as the country’s population officially reached 27 million.

Across the country, NSW saw its numbers rise 2.3 per cent or 186,124, with the increase totally driven by overseas immigration.

In Victoria, the population increased 2.9 per cent or 192,723, while Queensland jumped 143,589 or 2.7 per cent.

On a percentage basis, Western Australia saw the largest increase in population, with an increase of 3.3 per cent or 93,591 people.

Overseas migration accounted for 67,629 of the increased population numbers across Western Australia, which helped drive the rental vacancy rate to 0.3 per cent – the lowest in the country.

Real Estate Institute of Western Australia (REIWA) Chief Executive Officer, Cath Hart, said the strong population growth means the building industry across Western Australia can’t keep pace.

“While completions did increase in the third quarter of last year, our population keeps growing at near-record rates,” Ms Hart said.

“In the year to September 2023, there were nearly 17,000 completions of private and public dwellings, now compare that to the 37,000 new households in WA in the same timeframe. 

“That’s a shortfall of about 20,000 new homes.”

Source: ABS

Ms Hart said Western Australia’s surging numbers were likely to mean more pressure on renters and housing markets across the state.

“WA’s population remains the fastest-growing in the country, and there are little signs of this easing with the government adjusting its forecasts upwards,” she said.

“This will maintain pressure on WA’s sales and rental markets.

“We can expect to see house prices and rents continue to rise, homes to sell and lease quickly, and the rental vacancy rate to remain low for some time yet.”

Across the country, only 163,000 homes were approved for construction in the year to January 2024, which is 77,000 below the government’s construction target of 240,000 per year.

HIA Chief Economist, Tim Reardon, said The Intergenerational Report (IGR) in 2007 projected Australia’s population would not reach 26.8 million until 2034/35.

“Underestimation of population growth is a systemic policy failure that compounds the challenge of delivering sufficient housing,” Mr Reardon said.

“The ABS projected the national population to reach 26.9 million by mid-2024, a figure that had been exceeded by the time their announcement was released in November 2023.”

Mr Reardon said state and local councils could not be held solely accountable for undersupplying homes, without clear guidance on population growth.

“This is not just a short-term problem emerging due to a spike in population after the pandemic,” he said.

Shadow Minister for Immigration and Citizenship, Dan Tehan said the government had to reduce the number of overseas migrants coming in and ­argued that current volumes were “not sustainable”.

“We’ve got record numbers of people coming into Australia,” Mr Tehan said.

“They are causing the housing crisis. 

“They are causing a rental crisis … Yet businesses can’t get the workers that they want. 

“It’s a ­catastrophe.”

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Rowan Crosby

Rowan Crosby is a senior journalist at Elite Agent specialising in finance and real estate.