Immigration reboot to gather pace in 2022

After two years of border closures and restrictions, significant population growth is set to return to Australia.

Borders reopening

The immigration reboot is set to gather pace in 2022, leading to a new wave of demand for rental properties. The Budget papers mapped up a return to net overseas migration of 180,000 for 2022-3, and 213,000 for FY 2023-4, representing a strong rebound after two years of restrictions and border closures.

The Budget papers mapped up a return to net overseas migration of 180,000 for 2022-3, and 213,000 for FY 2023-4, representing a strong rebound after two years of restrictions and border closures.
Figure 1 – Budget paper forecasts / Source: Australian Budget 2022-3

Add in the natural growth of the population, being births minus deaths, and this sees population growth returning to around 350,000 per annum within the next two years, or a growth rate of 1.3 per cent, which is high for a developed economy.

Over the past 20 years, projections in the Intergeneration Report have consistently undershot the reality, underscoring both Australia’s popularity and the tendency for policy to become addicted to a strong immigration programme.

Election impacts

A change of government would do little to impact the outlook for immigration.

Australia has over 400,000 job vacancies and needs to refresh the supply of skilled workers urgently, so even assuming a change in government we expect population growth to be strong over the next few years, with the total headcount likely to increase by around 1 million over the course of 3 years.

The Leader of the Opposition has already hinted at the potential for permanent residency for some foreign workers under a Labor Government, which could grow the population significantly, suggesting that both sides of politics will adopt similarly pro-immigration policies in this election year.

Stay up to date with the latest property news

Subscribe to our newsletter to get the most up to date property news and insights delivered straight to your inbox.

There will be some issues pulling in the opposite direction, such as Australia’s high cost of living. But generally, Australia is seen to be a clean, safe, and popular destination, and the immigration programme should be comfortably filled given the strengthening labour market and falling unemployment rate.

Stock shortage

The next few years will be characterised by a chronic shortage of rental stock in some areas. We’re already seeing extremely tight rental markets in some cities, after years of restrictions on investor and interest-only lending, while foreign landlords have also largely been shut out of the market.

Australia is seen to be a clean, safe, and popular destination, and the immigration programme should be comfortably filled given the strengthening labour market and falling unemployment rate.

The Domain Group reported a rental vacancy rate for Adelaide of 0.2 per cent last month, for example, which is the lowest rental vacancy rate ever recorded in an Australian capital city on that data series. We can’t see that changing too much as the borders reopen either. Rents will probably rise by 10 to 20 per cent in many parts of the country this year, given the intense competition in evidence for quality rental stock.

Let us help you buy your next property

We can save you time, money and stress by handpicking an expert buyers agent with local knowledge, to secure your home or investment wherever you’re looking to buy throughout Australia.