Australia will reopen its international borders to more than 200,000 visa holders as it moves towards the final phase of the national reopening plan.
The federal government will immediately focus on priority skilled migration but also on international students and refugees. This move will accelerate our economic recovery and help address shortages in our labour market. And while all the extra migrants will create demand for goods and services, in the short term this boost in the number of workers may dampen further wages growth.
However, this will be a positive for our property markets.
Most immigrants initially rent for the first few years in the country, and this surge in demand will place an extra burden on our already limited housing supply.
In its latest update, ANZ stated house price growth will slow over the next year to 6% after median house prices boomed 21.9% over the year to September. The bank suggested that rising house prices will deter some home buyers, while APRA’s decision to ensure new borrowers can service a mortgage if interest rates jump 3% will put a brake on lending.
While we generally concur with ANZ’s forecast for 2022, we can’t see a good reason for house prices to fall in 2023 unless APRA intervenes and tightens the availability of credit.
The housing market growth will slow as the current levels of growth are unsustainable in the long term, but our improving economy and the opening of our international borders next year will underpin demand for housing.
It’s going to be very interesting watching the market and seeing how it responds to all these changes.
Remember, if you need any help or advice, we are just a phone call away.
All the best, Simon.
Source: Property Update – Michael Yardley