Prior to the COVID-19 pandemic, Australian cities including Sydney, Brisbane and Melbourne were amongst the fastest growing urban locations in the OECD. Net overseas migration has accounted for 51% of Australia’s population growth over the past 30 years, and a 2016 report showed that almost 40% of Sydney’s population was born overseas. Naturally, Australia’s migration rate has helped to drive healthy demand in the property market.
The COVID-19 effect on migration
Since borders closed down in early 2020, COVID-19 has altered many plans to migrate to Australia. Back in May Prime Minister Scott Morrison said that COVID-19 would cause more than a 30% fall in the migration rate in this current financial year compared to 2018-19 levels, and a whopping 85% in the 2020-21 financial year. Based on last year’s net overseas migration of 239,600 people, that could mean significantly fewer people moving to Australia across the 2020-21 year – most of whom would have moved to the major cities. So how could the COVID-19 migration changes affect house and apartment values down the line in Sydney?
The most likely markets to be impacted
There could be far-reaching impacts, but in the immediate term the rental market is the most likely to be affected. CoreLogic indicates that most new permanent migrants and international students tend to rent rather than buy – at least initially – and that we could see this effect permeate in a weaker rental market and less new home construction geared towards the rental market.
Of course, as the situation around COVID-19 evolves we could soon see national borders open up and more internal migration as people shift to seek employment and lifestyle changes. The incentives around HomeBuilder and first home owners grant eligibility could further stimulate property purchases.
What can be done?
With all of these changes, expert property management and sales services could be key to ensuring your property returns a competitive rental rate or sale price for you moving forward. We can help you to maximise the exposure of your listings through integrated advertising listings, as well as identifying the optimal sale or rental price for your property. In uncertain times, having the support of an experienced real estate team can be invaluable, because our expertise is your expertise.
We’d encourage you to get in touch today and get an appraisal or discuss how we can support your property requirements. While nobody can say with too much certainty how we’ll be travelling over the next 12 months and beyond, having specialist real estate advice in Sydney could help you navigate any turbulence.