Migrants coming to capital cities and major regional centres help boost house prices by as much as $6,500 annually, a university study shows. The report entitled The Impact of Immigration on Housing Prices in Australia reveals that house prices also grew by 0.9 percent in cities where the new migrant population increased by 1 percent each year.
“House prices would have been around 1.4% lower per annum, and units 0.8% lower, if there had been no immigration from 2006 to 2016. Chinese and Indian immigrants have high rates of homeownership.” said the report authors, senior lecturer at Monash Business School Daniel Melser, and RMIT University student Morteza Moallemi.
“Interestingly, the effect of immigrants on different property types is different – there is a bigger impact on houses than units or apartments,” Melser says.
Economist Esther Rajadurai says immigration offers several economic benefits, such as spending that boosts economic growth and government revenue. In effect, this helps offset slow growth and declining wages.
However, Reserve Bank of Australia Governor Philip Lowe said there was a link between expensive property prices and high immigration levels. ‘Infrastructure investment is the best housing policy,’ he said. ‘There’s very little we can do to increase the supply of well-located land but there’s one thing you can do – build great public transport.’ He argued building better transport links would make suburban and regional areas attractive to buyers and property investors, spreading demand more evenly across cities and the country, and thereby moderating prices.