Where will all our new migrants live?
New data shows overseas interest in Australian property has never been higher
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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.”
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Strong rental fundamentals and tight supply have driven more than $155 million in Sydney apartment block and residential investment sales over the past year.
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Sydney’s residential investment market has recorded $155 million in apartment block and townhouse sales over 2025, underscoring continued investor confidence in rental-led assets despite broader economic uncertainty.
The transactions were completed by Knight Frank’s Investment Sales agents James Masselos and Adam Droubi, who negotiated 19 sales across Sydney during the year.
Residential investments accounted for 75 per cent of their total sales activity, supported by more than 4,200 active purchaser enquiries.
Co-living deal sets national benchmark
Among the standout transactions was the off-market sale of 142 Carillon Avenue in Newtown, a 37-studio co-living apartment block located close to the University of Sydney and Royal Prince Alfred Hospital.
The property sold for $21.5 million, setting a new benchmark for the living sectors market nationally.
The deal achieved approximately $581,000 per bedroom, believed to be one of the highest per-bedroom results recorded for a co-living asset in Australia.
Inner-city assets trade in one line
Other notable sales included a group of 12 townhouses at 108 Illawarra Road in Marrickville, sold in one line for $14 million, and a block of 20 studio apartments at 171 Rowntree Street in Birchgrove, which changed hands for $6.7 million.
Both transactions reflected strong buyer competition for well-located residential assets with established income streams.
Supply constraints underpin momentum
Mr Masselos said Sydney’s apartment block market continued to benefit from tight supply and strong rental conditions.
“Apartment blocks and broader residential investments remain a robust asset class, underpinned by strong rental growth, record low vacancy levels and scarcity of stock,” he said.
He added that more than $25 million worth of residential investment opportunities are expected to come to market in 2026, with buyer enquiry remaining elevated.
Mr Droubi said competitive sales campaigns had become a feature of the market as investors sought secure income and long-term value.
“Supply constraints and ongoing population growth underpin market strength,” he said. “New approvals and completions lag demand, keeping stock tight and boosting both rents and prices.”
Vacancy rates keep pressure on rents
According to Knight Frank, rental demand across Sydney remains intense, with vacancy rates well below typical “healthy” levels.
Many middle and outer-ring suburbs are recording vacancies of around 1.5 per cent or lower, maintaining upward pressure on rents and reinforcing the appeal of residential investment assets.
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