New migrants moving to capital cities and major regional centres are helping to boost house prices by as much as $6500 each year, a new study has revealed.
In cities where the new migrant population grew by 1 per cent each year, house prices likewise rose by 0.9 per cent, according to the study titled The Impact of Immigration on Housing Prices in Australia by senior lecturer at Monash Business School Daniel Melser, and, RMIT University student Morteza Moallemi.
“House prices would have been around 1.4 per cent lower per annum, and units 0.8 per cent lower, if there had been no immigration [from 2006 to 2016],” they wrote, in the soon-to-be-published study
Mr Melser told Domain that the house price rises were consistent with those of other countries like the USA, where similar studies had been undertaken.
“Interestingly, the effect of immigrants on different property types is different – there is a bigger impact on houses than units or apartments,” Mr Melser said.
Specific migrant groups also had a bigger impact on house prices than others, given they were more likely to buy a home, Mr Melser said
“Chinese and Indian immigrants have high rates of home ownership,” he said.
In fact, 55.9 per cent of Chinese migrants between 2006 and 2016 were home owners, while 39.3 per cent of migrants from India owned a home and only 35.4 per cent of migrants from other countries bought a property, the study noted.
Melbourne’s median house price now sits at $908,734, on Domain data.
Economist Esther Rajadurai, who migrated to Australia in 2014, has also researched the economic impact of multiculturalism in Australia.
She said while rising house prices would be viewed as a negative for home-buyers looking to get into the market, it was good for the broader economy.
“While it is true that rising house prices is an undesirable outcome for the average home buyer, it is also a sign of a strengthening economy, “ Ms Rajadurai said.
“What must be done to facilitate a healthy property market are innovations in the supply-side of the market, bringing in policies that reduce the impact of demand-driven house price inflation.
“Infrastructure development is vital to accommodate a growing population.”
She also said housing policies that serve low-income households, such as the federal government’s First Home Loan Deposit Scheme, could deliver more equitable outcomes.
Immigration had brought many other positives to the economy, she said.
“Migrants contribute to consumption and spending which drives economic growth and government revenue – both key things needed in Australia’s economy in the light of its slow growth predictions and depressed wages,” she said.
“Australian Treasury statistics show that migrant intake from 2014-15 alone would provide a $10 billion boost to the budget over the next five decades.”