What lower migration means for the property industry - repercussions of COVID-19.

In 2020, when we closed our borders to international visitors and migrants in our attempt to curb the spread of COVID-19, we certainly faced a range of economic repercussions. For our property sector, this has led to a weaker rental demand caused by a slower population growth. 

Despite this, property developers across the country remain positive about the market. In a recent interview with ABC News, Jason Goldworthy, National Manager of Build-to-Rent for Mirvac explains, “we really see COVID as a bit of a speed bump, not dissimilar to the dip in market of about two years ago.” 

The majority of property investors have remained optimistic despite the pandemic, particularly in regards to the off-the-plan market. According to a survey by PIPA, 67% believe this is a great time to invest in residential property. Additionally, 77% of investors have said any concerns about potential falling house prices will not result in them putting their investment plans on hold. 

The national treasury forecast for FY20/21 indicates our lowest rate of population growth since 1917. While there are other factors at play, one key contributor to this dip is the low overseas migration to our shores. Capital cities have been most impacted as approximately 84% of all migrants typically travel there - three quarters of whom arrive in Sydney and Melbourne. 

The lower than average migration numbers is understandable considering the circumstances but the question for the property industry is how this drop in migration will affect those of us operating in these major cities. 

Simon Basheer, President of the Urban Development Institute of Australia (UDIA) comments, “when COVID-19 hit, housing markets were impacted and this was a key reason the Commonwealth Government was quick to implement and extend the HomeBuilder initiative which has had a powerful impact… It has been a stellar example of smart, targeted and effective policy-making and stimulus.”

While the travel restrictions have had a clear impact on the property industry, the market is currently holding strong. According to PEXA, December 2020 witnessed a record two year high for property settlements - 79,187. Property developers remain confident the market will be quick to recover and there is industry-wide optimism that the market will continue to hold strong until the pandemic has settled. 

The HomeBuilder Grant has been extended until 31 March 2021. For more information on how to take advantage of the HomeBuilder Grant before it expires, click here. If you’re unsure whether now is the right time to purchase a property, read more here.