Over the years, Australia’s population growth of 250-300,000 a year has been one of the drivers of the property market.
Now, with international borders closed, many are wondering if the property market will go into hibernation.
Undoubtedly, cutting off immigration and international students will have an impact on property market.
But what many commentators have missed is the number of Australians returning home who will need accommodation – and the fact that, these people could be here for years until a vaccine is found (which is probably when the borders will reopen to immigrants).
Already 480,000 Aussies have returned home as a consequence of COVID-19.
And this week it was announced that another 300 Australians will be able to return home each week and, the government is exploring ways to bring back as many as 26,000 Australians by Christmas.
Many of these returnees will choose to remain here in one of the safest, most prosperous and stable, AAA-rated countries in the world.
Add to these the millions of talented and/or financially successful individuals seeking to flee escalating health or political risks in the US, UK, Europe, Taiwan, Hong Kong and China. It has the makings of an eventual net overseas migration tsunami, which will provide a powerful tailwind for aggregate demand, contrary to what everyone else is telling you about weak population growth.
NSW house prices rose one per cent last month – and Victoria is likely to follow suit now that lockdown is easing.
We are far from out-of-the-woods yet (especially as we have to deal with the fiscal hangover), but the picture is nowhere near as bleak as we feared six months ago.
Graeme Salt is a leader of The Futurus Group, whose brands primarily comprise, Origin Finance, Chan & Naylor Finance, as well as Walker & Miller Training. For a no-obligations consultation on your home loan needs, please contact Graeme on 02 9922 5055