The Impact of Migration on Rent and House Prices

The Impact of Migration on Rent and House Prices

By: Nfinity Financials0 comments

New info from CoreLogic shows that when people move to different areas, it affects rental prices a lot, but it doesn’t always make house prices go up. This discovery goes against what we usually think and helps us understand better how people move around in Australia.

CoreLogic looked into it and found that in places where lots of people are moving in from other countries, rent prices go up a lot, but house prices don’t always follow suit – sometimes they stay the same or even go down. They saw this happen in places like Carlton, a suburb in northern Melbourne, where there were more people moving in, but house prices went down while rent prices went up.

The Australian Bureau of Statistics (ABS) said that the population went up by 2.5% in the year until September 2023, mostly because of migration. But CoreLogic found that how much migration affects housing markets depends on things like where the migrants come from (inside Australia or from overseas) and how many homes are already there.

The research head at CoreLogic pointed out that most of the people coming to Australia temporarily don’t buy houses; they rent them instead. Because of this, there’s been a big jump in the number of people looking to rent homes, which has made rents go up.

Interestingly, CoreLogic found that in the places where lots of people are moving, there wasn’t a clear link between more people coming in and house prices going up. It seems like other things, like how many homes are available and if people are buying homes before they’re even built, have a bigger impact on prices.

In places where lots of people are moving from one part of Australia to another and there are already enough homes, migration didn’t really change rent or house prices much. According to experts, this is most likely due to the fact that there were already enough homes available and that the additional residents didn’t really matter because some individuals may have purchased homes before they were even constructed.

Conclusion

CoreLogic’s research shows that how migration affects housing markets is more complicated than we might think. While it definitely affects rent prices, whether it affects house prices depends on things like how many homes are available and if people can afford them. As more people move around Australia, it’s important for policymakers and people involved in housing to understand these complexities better.

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