Foreigners are moving en masse to a cluster of suburbs in Sydney and Melbourne as immigration hits a record high and apartment rents soar.
A record 454,400 people moved to Australia in the year ending March, on a net basis counting arrivals minus departures.
Migrants accounted for 81 per cent of the population increase of 563,200, along with births, with Australia hosting 1,543 new people per day.
South-west Sydney, covering Bankstown and Lakemba, received the most migrants, along with Parramatta, a CoreLogic analysis of census data from 2016 and 2021 found.
Melbourne’s south-east, which covers Dandenong and Pakenham, as well as the deprived areas of Brunswick and Docklands, is also home to a higher proportion of new migrants.
The data comes as house rents in the capital soared 14.9 per cent in the year to August, but the pain was even worse in May when rental costs rose to a record annual rate of 16.5 percent.
A CoreLogic analysis of census data from 2016 and 2021 showed southwest Sydney, covering Bankstown and Lakemba, received the most migrants, along with Parramatta, based on Australian Bureau of Statistics map areas.
Melbourne’s south-east, covering Dandenong and Pakenham, and the inner city, covering the city center with Brunswick and the Docklands, were also home to a higher proportion of new migrants.
Where do most immigrants settle?
The number of permanent and long-term overseas arrivals in Australia has doubled in a year, driven by more international students and skilled migrants since Australia’s borders reopened in December 2021.
This is based on 681,000 arrivals before departures.
CoreLogic economist Kaytlin Ezzy said existing renters are feeling the pressure as immigration increases.
“The majority of recent long-term migrants rent before buy,” she said.
“The impact of this additional demand has already been seen in the rental market, with housing rents in the capital recording a new record annual growth rate.”
Ms Ezzy said housing rents were likely to continue to rise at a rapid rate as more foreign migrants arrived.
“Although deteriorating rental housing affordability has led to a slowdown in rental growth in recent months, housing rents are expected to remain high for some time, particularly with net overseas migration increasing. is expected to remain high through 2023 and 2024,” she said.
CoreLogic estimates the units make up 25.9 per cent of the national housing stock, but this has risen to 30.4 per cent in Australian capital cities, up from 22.9 per cent in 2010.
Ms Izzy said Australia would increasingly rely on more apartments to house a growing population.
“The medium to high density sector is increasingly becoming an important tool for providing additional housing stock for Australia’s growing population, particularly as households continue to congregate in metropolitan areas,” he said. she declared.
Possible rate cuts in 2024 could also lead to higher apartment prices – something that did not happen in 2021, when the Reserve Bank’s record 0.1% interest rates boosted housing but not the unit value.
Foreigners are moving en masse to a cluster of suburbs in Sydney (pictured, Lakemba, in the city’s southwest) and Melbourne, as immigration hits a record high and rents soar.
READ MORE: Suburbs with Chinese buyers
Chinese interest in Australian property is now so strong that potential buyers are having to make an appointment to view properties from major groups, an agent has revealed.
Peter Li, managing director of real estate agency Plus Agency in Sydney and Shanghai, said he now holds seminars for up to 20 buyers at a time – with drinks and snacks.
“Currently, a significant number of units under construction, high interest rates and low consumer confidence could moderate unit demand and price growth,” Ms. Izzy said.
“But once the pipeline is completed, Australia will face a relatively low number of approved projects, which could create a temporary gap in the supply of new units.
“With a potential decline in the cash rate in 2024, stronger buying demand could fuel stronger price growth in the unit market at present.”
Sydney’s median unit price of $822,145 is significantly higher than Melbourne’s $603,642.
But parts of southwest Sydney are more affordable, with Lakemba having an average apartment price of $424,555, which is significantly cheaper than Hornsby’s level of $686,346.
Australia’s national job vacancy rate stood at just 1.2 per cent in August, according to data from SQM Research.
Median weekly apartment rent in Sydney climbed 20.4 per cent year-on-year to $666 per week as of September 12, while equivalent costs in Melbourne climbed 17 per cent to $527.
New South Wales Premier Chris Minns has suggested building more apartment towers to house the growing population.
“This won’t please everyone, but to solve the housing crisis we need to build, not just build – and that’s exactly what we’re doing,” he tweeted in August.
New apartment towers are being built in Sydney’s western suburbs, but not in the wealthy eastern suburbs close to the city.
Nicky Williamson asked whether wealthy postcodes across Sydney Harbor would build more apartment towers.
“Vaucluse and Mosman will want to do their part too, won’t they?