Internal Migration Drives House Prices

Posted on 19/08/2019  
Internal Migration Drives House Prices

Propertyology, a good source of research on real estate, believes that not all kinds of population growth are equal. Some are better than others.

It argues that the type of growth that most boosts real estate markets is internal migration - people moving from one part of Australia to another, as opposed to migration from overseas.

It says internal migrants are most likely to buy real estate when they move to another part of Australia while overseas migrants are more likely to rent.

Propertyology Head of Research Simon Pressley says intrastate and interstate migrants – existing Australians who elect to move from one city to another – were likely to strengthen property prices in the cities they moved to far more than the flocks of overseas migrants looking to start a new life in Sydney and Melbourne.

“Both of Australia’s two largest cities are currently in the middle of their biggest property market downturns since the late 1980s – this is occurring at a time when both cities produced two consecutive years of all-time record high population growth,” Pressley says.

“Yes, we all need to live somewhere, but there’s no law that says one has to buy the roof over your head. In fact, the vast majority of overseas migrants don’t buy for several years, if at all – they rent. This is especially the case in Australia’s most expensive city.”

Pressley says thorough analysis of the data confirms that the locations of choice for Australian residents are satellite cities, or tier-2 cities on the outer-fringe of capital cities, and major regional cities, which are classed as tier-3 cities that play the role as a ‘capital city’ for larger regions.

Queensland, Hobart and parts of regional Victoria and New South Wales are the big winners. Number one on Australia’s popularity winners’ list is the Gold Coast, followed by the Sunshine Coast and Greater Geelong.

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