It's not surprising that our high levels of migration are turning our rental markets on their heads.
Obviously when more people move to an area, they need places to live, and that increases the demand for housing.
As a result, it affects the prices and rents of homes.
Quite clearly we saw the reverse of this happening in 2020, when fewer people were coming from other countries to live or study in Australia and more empty rental properties were available.
When there are more vacant homes, landlords must lower their rents to attract tenants.
And while this was challenging for many landlords, it was actually good news for people looking for rentals in the inner cities.
They had more options and could find places to live at lower prices.
PropTrack reports that searches to rent from overseas on realestate.com.au hit an all-time low plummeting by 50% between January and April 2020 in the early days of the pandemic.
But then, as our borders re-opened, overseas rent searches skyrocketed, jumping by 65% between 2021 and 2022 according to Proptrack.
According to PropTrack's numbers, searches to buy also increased, rising by 10% year-on-year.
This more modest rise is unsurprising given just over 70% of new migrants are renters.
Ms Karen Dellow, Senior Audience Analyst at PropTrack explained:
"Property searches are a good indicator of current and future demand and reveal which countries are driving that change in demand.
In this way, rental searches are a good predictor of overseas migration to Australia."
According to PropTrack, the population grew by 496,800 in 2022, the highest increase in 15 years.
Of that, 78% came from overseas migration, most of which were overseas students.
Ms Dellow further explained:
"Comparing the increase in rental searches over the same period, the data shows a significant increase in interest from overseas searchers.
Nationally, searches for rental properties on realestate.com.au increased by 65% in 2022 compared to 2021, with net overseas migration as the main contributor.
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So far this year, searches to buy and rent are higher than last year and are expected to continue rising throughout the year.
Rental searches in the first five months of this year are already up 16% on the last five months of 2022, while buy searches are up by 11%."
Ms Dellow pointed out that in April, 1.37 million people arrived on student, permanent, or various work visas.
Of these, 42,830 were international student arrivals - 21,700 more than in April 2022.
Well, this is placing additional pressure on the rental market.
PropTrack's research revealed that the top countries for rental searches are New Zealand, the US, the UK, India, China, and Singapore.
Interestingly, these are the top countries for arrivals into the country.
In fact, last month, New Zealand was the largest source country, accounting for 21% of all visitor arrivals and 28% of all rental searches.
Moreover, the largest year-on-year increases have come from New Zealand, China, and the UK.
Obviously, the return of Chinese students to Australia has significantly impacted the increase in rental searches, boosting volumes by 58%.
Arrivals from China increased by 19% over April and were a staggering 800% higher compared to year-on-year.
Ms Dellow commented:
"Although overseas arrivals have skyrocketed since the borders re-opened, they are yet to reach pre-pandemic levels.
According to the latest government forecasts, Australia is set to see net overseas migration of 1.4 million over the next five years.
This increase will significantly add to the pool of renters and will add further pressure to an already stressed rental market.
The national rental vacancy rate is currently just 1.4%, 12% lower than last year and almost half its pre-pandemic level. Furthermore, available rental listings are 30% lower than pre-pandemic.
Migration adds significantly to the health and vitality of Australia’s economy, and it is essential that more properties are built to provide homes for our growing population."
Source of charts and commentary: REA Insights