Melbourne is back in the green as more people move to the city than leaving it.
More people are moving to Melbourne than leaving the city for the first time since the onset of the pandemic.
The city’s resurgence has been revealed in recent data from national removal business Muval, that Melbourne is the preferred destination for people relocating from interstate to regain its status as the number one place in Australia.
During February and April this year, the city accounted for 30 per cent of all capital city moves, and just 25 per cent of all major metro outbound moves — the city’s lowest figure on record, according to Muval.
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Melbourne marked a significant turnaround with a positive 13 per cent net migration in February and a positive two per cent in April.
Net migration is the difference between the number of people entering a city and the number of people leaving the city over a period of time.
This was Melbourne’s first positive net migration since January 2020, just before the pandemic and lockdowns began.
Outside the famous steps at Flinders Street station during lockdown in 2021. Luis Ascui
During the pandemic, the city’s net migration plummeted to negative 61 per cent in August 2020 and negative 64 per cent in September 2021 as thousands fled the world’s most locked-down city.
But, now the tide has turned, and the city is experiencing a recovery in migration figures.
Muval co-founder and chief executive James Morrell said Melbourne had taken longer to bounce back compared to other cities, but was now reclaiming its position as a key destination for interstate movers, particularly those defecting from Sydney.
More people are moving into Melbourne than leaving for the first time since the beginning of the pandemic
“After the borders opened, Brisbane experienced significant growth, which has slowed down a bit,” Mr Morrell said.
“Melbourne, on the other hand, had consistently shown positive net growth.
“Sydney remains the city with the most enquiries to move, and it ranks third on the list of preferred destinations, following Perth and Melbourne.”
Despite the positive migration trends, Melbourne faces issues with housing shortages.
Muval co-founder and chief executive James Morrell said Melbourne had more affordable options than Brisbane and Sydney.
Mr Morrell said the housing situation in Melbourne might not be as severe as in other capitals.
“Brisbane is dealing with a substantial housing shortage due to the interstate migration seen during Covid, which is still ongoing,” he said.
“In comparison, Melbourne’s situation is somewhat relative.
“People are finding it easier to secure housing in Melbourne than in Brisbane, a significant shift from just a few years ago when Melbourne saw migrants moving from Brisbane.”
Housing Industry Association senior economist Tom Devitt said Melbourne’s current migration inflows were not as strong as the pre-Covid era, attributed to the impact of lockdowns and a return to longer-term averages.
Despite positive net migration, experts aren’t anticipating pre-pandemic net inflows of buyers.
“Pre-pandemic net interstate inflows to Victoria were unusually strong due to robust economic growth,” Mr Devitt said.
“Historically, net inflows fluctuated around zero from the late ‘90s to early 2010s. Significant net outflows were seen during the ’80s, particularly around the 1991 recession.”
Looking forward, the economist said he doesn’t anticipate a repeat of the pre-pandemic net inflows, especially with more affordable land prices for housing elsewhere.
The economist warned that ongoing changes to the building code and new taxes on the building industry posed challenges.
Mr Devitt said construction costs could be driven up making housing less affordable for buyers and less viable for builders.
For Melbourne to meet its housing targets, the HIA has proposed several policy reforms to reduce construction costs, which they believe are critical for home building recovery and addressing the state’s housing crisis.
These suggestions include abolishing stamp duty, pausing future changes to building regulations and causing changes to building regulations.
Mr Devitt also stressed the need for faster greenfield land releases and planning changes to encourage higher density construction.
“The market is consistent and performing well as we head into the spring selling season.”
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