Controlling migration would have an immediate impact on runaway house prices, one expert says, and would do it quicker than simply addressing housing supply issues.
FoundIt head of research Kent Lardner said migration had fuelled home price growth across SA, and that too much of the political discourse about the housing market in recent years had been overly focused on supply alone, without addressing demand drivers such as migration.
“When we define the market, all the narrative has been around supply,” he said.
“Since Covid, there has only been one issue talked about regarding house prices, which is supply. In reality, anyone who has done high school economics, knows its supply and demand.
“One thing we can control is demand from migration.”
It’s time to control migration in order to curb price growth. Picture: Brenton Edwards
Mr Lardner said returning to a pre-Covid era population growth would ease pressures by 2 to 3 per cent a year.
“That means a market that would this year grow by 5 per cent, would only grow by 2 per cent,” he said.
“It’s a massive impact. It may not sound like much, but that change in growth each year is substantial.”
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Mr Lardner said while intrastate migration was uncontrollable, overseas migration was.
“Migration should be linked and paired to housing supply,” he said.
“When we get on top of supply, we can open the country further.
“Policy needs to adapt.
“We can bring people in, but only to a volume that matches our housing supply.”
Mr Lardner said where more households are added each year than new homes are built, demand pressure does not spread evenly, concentrating in more affordable price bands.
He noted Adelaide had become the preferred choice of many new arrivals, meaning migration did influence prices.
FoundIt head of research Kent Lardner
“Migration has had a reasonable impact on Adelaide price rises,” he said.
In Adelaide, he singled out five areas where this was most evident.
The first was Elizabeth, where values are up 14 per cent in 12 months to $610, more than half households rent and most spend 50 per cent of their income on it.
Christie Downs has seen growth of 13 per cent to $720,000; Hackham West – Huntfield Heights values are up 20 per cent to $735,050; Salisbury home values are up 15 per cent to $740,000, and Smithfield – Elizabeth North home values are up 12 per cent to $580,000.
“Suburbs where housing supply is scarce won’t be impacted much from a change in migration, but if we move to areas with a high supply of greenfield sites, prices are more vulnerable,” he said.
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Ray White Port Noarlunga agent Jackie Scott, who is currently selling a home at 8 Hartland Ave, Christie Downs, said prices had risen sharply due to both demand, and the fact older affordable housing was being replaced with newer, more expensive stock.
“We’re getting multiple offers on every single property,” she said.
“The newer ones are going for mid-sixes, which is still a lot of money for young people to be able to afford, so a lot of them, especially with interest rates where they are, feel they can only go to high-$500,000s, so some of these are becoming out of reach for them.”
Real-estate agent Jackie Scott outside the home she is selling at Christie Downs. Picture: Eleni Tzanos
Ms Scott said migration contributes positively to society, but the increased population meant greater competition for property.
“That said, the Foreign Investment Review Board changes have made it harder for them to buy if they’re not an Australian resident, they can’t just come in and buy, so there are still opportunities for everyday Australians to purchase,” she said.
– with Aidan Devine
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