Immigration reboot to gather pace in 2022

BuyersBuyers

Borders reopening

The immigration reboot is set to gather pace in 2022, leading to a new wave of demand for rental properties, according to Pete Wargent, co-founder of Australia’s first national network for buyer’s agents, Pete Wargent.

Mr Wargent said, “the Budget papers mapped up a return to net overseas migration of 180,000 for 2022-3, and 213,000 for FY 2023-4, representing a strong rebound after two years of restrictions and border closures”.

Figure 1 – Budget paper forecasts

Source: Australian Budget 2022-3

“Add in the natural growth of the population, being births minus deaths, and this sees population growth returning to around 350,000 per annum within the next two years, or a growth rate of 1.3 per cent, which is high for a developed economy”.

“Over the past 20 years, projections in the Intergeneration Report have consistently undershot the reality, underscoring both Australia’s popularity and the tendency for policy to become addicted to a strong immigration programme” Mr Wargent said.

Election impacts

BuyersBuyers CEO Doron Peleg said a potential change of government would do little to impact the outlook for immigration.

Mr Peleg said, “Australia has over 400,000 job vacancies and needs to refresh the supply of skilled workers urgently, so even assuming a change in government we expect population growth to be strong over the next few years, with the total headcount likely to increase by around 1 million over the course of 3 years”.

“The Leader of the Opposition has already hinted at the potential for permanent residency for some foreign workers under a Labor Government, which could grow the population significantly, suggesting that both sides of politics will adopt similarly pro-immigration policies in this election year.”

“There will be some issues pulling in the opposite direction, such as Australia’s high cost of living.”

“But generally Australia is seen to be a clean, safe, and popular destination, and the immigration programme should be comfortably filled given the strengthening labour market and falling unemployment rate” Mr Peleg said.

Stock shortage

Pete Wargent of BuyersBuyers said that the next few years could be characterised by a chronic shortage of rental stock in some areas.

Mr Wargent said, “we’re already seeing extremely tight rental markets in some cities, after years of restrictions on investor and interest-only lending, while foreign landlords have also largely been shut out of the market.”

“The Domain Group reported a rental vacancy rate for Adelaide of 0.2 per cent last month, for example, which is the lowest rental vacancy rate ever recorded in an Australian capital city on that data series. We can’t see that changing too much as the borders reopen either.”

“Rents will probably rise by 10 to 20 per cent in many parts of the country this year, given the intense competition in evidence for quality rental stock” Mr Wargent said.

/Public Release.