Where will all our new migrants live?

Australia is in the midst of a migration surge with 715,000 net arrivals expected over the next two years alone, according to government forecasts.

While it is clear that Australia’s labour market is tight and many industries are in desperate need of more skilled workers, the challenge is how are we going to house all these new people?

Migrants’ typical path in terms of housing is to rent first, either close to their employment or in areas where there is an established community of fellow countrymen or family already living there. Property data house CoreLogic estimates it takes about five years for most migrants to buy a home. However, Australia is in the midst of a rental housing crisis, and this may be leading to more migrants buying a home immediately, thereby adding to demand and contributing to the somewhat surprising rate of home price rises this year, despite significantly higher interest rates.

“A significant lift in net overseas migration has run headlong into a lack of housing supply,” says CoreLogic research director Tim Lawless. Given the extraordinarily low rental vacancy rates across Australia today, Mr Lawless said “it’s reasonable to assume more people are fast tracking a purchasing decision simply because they can’t find rental accommodation.”

So, where will all our new migrants go?

New data from property advertising portal realestate.com.au (REA) provides some insight into where migrants are looking for their first home. By analysing page views among overseas site visitors over the past six-month period, REA can reveal which suburbs are capturing the most interest.

It’s worth noting that ‘overseas buyers’ is a broad category representing many different types of property purchasers, and the data does not distinguish between them. Some may be impending new arrivals such as families or international students. Some may be the parents of international students seeking to purchase a home for their child while studying here, and some may be expats researching the market ahead of their return home. The rest may be foreign investors seeking to invest capital. There has been a resurgence in foreign investment in 2023, particularly from China where the local property market is cooling as the economy enters a deflationary period.

REA senior data analyst Karen Dellow says interest in Australian property from overseas has never been higher. According to the data, Melbourne is the most searched location in Australia among overseas visitors to the REA site, followed by the Gold Coast, Brisbane CBD, and Sydney CBD. Also within the top 20 locations are Perth CBD and its inner suburbs, the Queensland Sunshine Coast, Adelaide CBD, and the premium Melbourne suburbs of Brighton, South Yarra, and Camberwell.

Historically, the top two locations for new arrivals have long been Melbourne and Sydney, but the data implies that Queensland is gaining more attention. Half the locations in the top 20 suburbs are in Melbourne and 25% are in Queensland.

The data also shows the suburbs gaining increasing interest from overseas buyers. Ms Dellow said searches for properties in Brunswick East, in inner Melbourne, have increased by 60%, closely followed by Carlton North. “Both suburbs have seen significant development in the past few years and are close to the University of Melbourne and the CBD,” Ms Dellow said. “Searches for Ashgrove in inner Brisbane have increased by 45%, and the Sunshine Coast’s Mooloolaba; and Burleigh Heads on the Gold Coast, have also become more popular.”