Overseas migration

It is little surprise that many are calling for fewer overseas migrants.

This is what happens when over 400,000 people arrive in Australian in one year from overseas.  This is especially the case after a lockdown when the country lost 85,000 residents during 2021.

Chart 1 shows the rise and fall in net overseas migration to Australia from 1864 to 2034.

Some are calling for an annual net intake around 120,000 per annum.  Others want an even lower yearly target.  I think these limits are based on the longer term average, which frankly is never going to fly.  See chart 2.

The Federal government, in their latest budget papers plus their Centre of Population and Intergeneration Report mouthpieces, are forecasting an annual net migration result ranging between 235,000 and 316,000 between fiscal 2024 and 2034.

As shown in chart 2, this decade range, averages about 250,000 people per annum.

Yet, if the trend line between 1995 and 2019 were to continue – Covid impacts aside – we would likely see some 300,000 new migrants settle in Oz each year over the next decade.

Two of the largest diasporas to Australia are from China and India these days.  Also, of note are increasing number of migrants coming from The Middle East and African nations.

Most new migrants settle in, or around, Sydney and Melbourne. There is some spill over in southeast Queensland, Adelaide and Perth.

From a real estate viewpoint, these diasporas buy property and are often repeat housing investors.  Which is good news for some – like sellers and property orientated businesses.  Maybe not so much, at present, for buyers or renters given the current circumstances.

Whilst there is an increasing complaint about increasing traffic; too few dwellings; overcrowding; rising prices; longer queues and so on – many of them upfront and personal – I cannot help but think that there is more than a just a bit of xenophobia at play here too.

We have complained about such things in the past.

It wasn’t that long ago that Americans in Australia (and the UK) during the WW2 were described as ‘overpaid, overdressed, oversexed and over here’.

And maybe the immigration impact on the current housing market isn’t as bad as many are making out.  My table this post shows that most overseas migrants to Australia are on student visas.

The majority of these visa holders undertake tertiary studies in Oz and many live in apartments, some of which are purposed built for them and a lot were left empty during the Covid period as students returned home.

Overseas student’s parents – especially in the case of Asian parentages – frequently own such apartments.

As I mentioned last week there are strong economic and geopolitical reasons why Australia is likely to continue to invite (and attract) a high level of overseas migration.

To many moving here our cities – racial intimidation aside – are bliss when compared to where they have come from.

I believe we are likely to see an overseas net intake between 250,000 and 300,000 per year.  This means Australia is likely to increase by one million people every two and half to three years.

We can hold this intake.  We need to do so.  We also need to spend public monies better.

It’s time to dismiss the ‘bread and circuses’ and start focusing our spend on infrastructure, water supply, food production and security, intelligent energy provision, select manufacturing and relevant technologies.

Moreover, a rigorous discussion about our population shape is needed with the Australian public.

This is needed now before we find ourselves up shit creek via a Brexit like referendum and a similar result.



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Home groan

I don’t know about you, but I am losing count as to how many new homes the federal government is promising to build over the next five years.

At the time of writing, it is up to 1.2 million – or 240,000 per annum – between 2024 and 2029.

The Albanese government will give the state/territory governments $15,000 every time a new home will be built.

This will apparently help solve the rental crisis and supply more affordable housing.

Oh groan!

Let’s unpack this a bit, shall we?  And it is all about demand and supply.


The demand for new homes is likely to be elevated.

Why?  Because there is higher annual level of population growth planned over the next five to ten years, and probably longer.

See charts 1 and 2 below.

Assuming this population growth eventuates – and despite growing dissention about the current and planned immigration intake – it is very likely, as there are strong economic and geopolitical reasons why, there will be a need to build some 230,000 new homes each year over the next five years.

When taking a decade long view, the new housing need is just under 210,000 new digs per annum.


The current new housing market is undersupplied, by my reckoning, by the tune of some 100,000 dwellings.

See table 1 and chart 3 below.

The federal government has visions of helping supply some 240,000 new homes each year, from fiscal 2024 to 2029.

Chart 4 shows that it will be very hard, if not impossible, to supply over 200,000 new homes, on a consistent basis, over the next five to ten years.

Some end comments

For mine we will not see an early election.  Nor will there be a rent freeze or any rental controls.

Labour and The Greens will negotiate a higher annual housing donation to the states/territories over the next five years, so instead of $500 million per year – as currently planned – it might be $1billion in fiscal 2024, $750 million is 2025, etcetera, tapering back over time.

This will do little to help new housing supply, especially when it comes to affordable housing, homes that most people need or even available residences.

The proposed $15,000 transfer per new dwelling start from the federal coffers to the states/territories will also have some heavy caveats, like the need to use unionised labour for construction.

FIRB regulations are also likely to remain lax, allowing overseas buyers to purchase off-plan or newly constructed homes in Australia.

This – coupled with the overarching current mindset that higher density living is some form of magic panacea – will see much of this federal government largesse go towards high-rise apartment builds.

Some of these new builds will be in the build to rent space, but much will be built to sell.

On average – and when excluding the Covid-19 period – over the past five years, between a third and half of new high-rise apartments were sold to overseas interests, and many of these – roughly 40% – are locked up.

History is likely to repeat.

The government should offer nothing, except clear the roadblocks that delay new housing, yet instead the $10 billion Housing Australia Future Fund will distort the housing cycle, generate little in terms of affordable and available new homes and we will all have to pay (again) for helping overseas interests buy Australian dwellings.


End note

In coming weeks, I plan to continue to this theme.  I will be covering these topics.

  • Net overseas migration. It is really too big?
  • What type of new homes do we really want?
  • Are developers really land banking?
  • What really is going on with the rental market?

Lots of reallys!

If these topics interest you then keep an eye out for my Tuesday PM email or revisit this website.



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Here is two numbers worth remembering:  4 and 13


Since 1980 the time between house price growth peaks is four (4) years and not the often quipped seven (7) years.

And it would appear that the time between peaks is getting shorter.

This makes sense given the way we receive information these days and how fast news spreads.  Gone are the days of a weekly or even monthly real estate report in the printed press.  News is at our fingertips 24/7. Quarterly house price growth reports have now morphed into daily indexes.


It also takes about 13 years for house values to double.

It is often said that housing values double every seven years; that it is that they grow by around 10% per annum.

Well, that might have been true in some distant past – and was probably not – but on recent trends; even when factoring in the big price hikes in 2020 and 202; the annual rate of capital gain, across Australia and for detached houses, is now 5.4%.

End notes

Of course, there are a range of different locational experiences – in terms of both cycle length and annual gains – across the country.

Some locations miss a cycle – because they get oversupplied or overvalued – think regional resource towns and the most recent annual price growth experience ranges from 3.7% (19.5 years to double in value) to 10.4% (7.3 years) depending on the which major urban area is investigated.

Sorry folks but these findings are part of a recent consultancy job.  Embargoes apply.


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Low hanging fruit

Oh, what joy!

The new Draft Southeast Queensland Regional Plan has just been released and well it is riveting reading!

Big promises, based on false pretences.  Get ready SEQ to start living on top of each other.  Sardine cities here you come and at top prices.

Well, a simpler way to make more of what you have got is to encourage smaller residential allotments in new estates and as part of the infilling of the inner, and especially, middle-ring suburbs.

Our two tables this post shows that Queensland doesn’t do small lots, nor does the southeast corner of the state.

Small lots and infill works.  Go here for a real live Brisbane example.  So do backyard homes.

A key to making them work – other than of course allowing them to be developed – is changing the infrastructure charge.  The first change is to levy these charges at settlement or completion; and secondly to charge a percentage of purchase price or land value, not a flat fee.

I suggest 2.5%.

This will see more developers, and home owners, maximise what they already have and deliver more affordable housing to boot.



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New dwelling status

A quicker read this week.

Four tables are included.

Tables 1 and 2 cover past and projected population growth plus the underlying demand for new dwellings by state and territory and for Australia on the whole.

Table 3 covers past dwelling commencements.

Table 4 provides a balance reading between new housing supply and housing need.

Some observations

  • Annual population growth is expected to increase. I do think that Victoria’s official forecast is too high, and Queensland’s is too low.  See table 1.
  • As a result, the need to build more new homes has risen too. On average the need for new dwellings over the past five years was around 147,000 per annum.  Over the next half decade this underlying demand is likely to reach 227,000 each year.  This is an 80,000 increase or a 54% boost.
  • The 227,000 annual demand is the equivalent of building a Canberra or Newcastle each year. And the 80,000 increase from the previous annual five year average is like building another Hobart every year.
  • In addition, the need for new housing builds during 2022/23 is 273,750 or about equal to building another Gold Coast! These are big numbers.  See table 2.
  • And for those that are into such stuff, the annual demand for new homes is based on the number of adults per dwelling (which is 1.92 for Australia) and there are on average 0.58 children per household. Some of my colleagues use 2.50 people per dwelling to help determine underlying new housing demand.  This is wrong.  You need to remove people children from the equation as they – in over 95% of cases – live with adults.  Revisit table 2 and the first row.
  • There have been only 171,500 dwelling commencements (my estimates based on the second half of calendar 2022) during 2022/23 – so the new housing market is undersupply, by some 102,000 dwellings or by 38%. All states and territories are undersupplied this year.  See tables 3 and 4.
  • Yet table 4 holds some interesting information. When looking at housing demand versus new supply (i.e., housing commencement) the last couple of rows in table 4 suggests that New South Wales, Victoria, the Northern Territory and to a lesser extent South Australia and the ACT have had enough new builds over the past five years.  Whilst Queensland, Western Australia and Tasmania remain undersupplied.
  • Let’s unpack this a bit.
  • Firstly, given the fall in housing need during 2020/21 (Covid immigration restrictions) which saw annual population growth across the country fall to just 32,790 and hence new housing demand was around 18,000 in fiscal 2021, yet new housing commencements were 213,700 that same year.
  • This mismatch was largely due to the HomeBuilder initiative and record low interest rates. Yet some 15% of these new housing starts (≈ 33,000 dwellings) – and despite them being from financial 2021 – have yet to be completed, due to the building strife that is currently plaguing Australia’s building industry and some state government’s building programmes.  This is especially the case in Queensland given the 2032 Olympics.
  • In addition, there has been a large volume of new housing starts during fiscal 2022 (≈ 208,000 across Australia) of which some 16% (≈ 34,000) have not yet been completed. Ditto above.
  • So, in summary there are just under 70,000 new dwellings that have started construction but are yet completed in the Australian new building pipeline. Assuming these dwellings are delivered, this will help alleviate housing supply – but these 70,000 new dwellings –– equate to just 25% of the 2023 demand.
  • Almost a lot of the new housing in New South Wales and Victoria is purchased by offshore interests. Quite a bit of this stock – my estimates is that it is as high as 30% – is locked up, and if used, it is only occasionally.  This is an issue that needs to be addressed and that is a topic for a future Matusik Missive.


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Four things

This post started as a dwelling price table but has morphed into something more.

Part of the reason is in reply to the nonsense that the RBA has been babbling on about in recent weeks – in this case about the need to get the unemployment rate up (?) to 4.5% – as this mark is what the RBA calls ‘full employment’ (go figure!) – resulting in some 140,000 people needing to lose their jobs in order to help bring inflation back to the RBA’s 2% to 3% annual CPI target rate.

This – to me – is just jawboning giving the RBA cover to lift interest rates again.

Yet this current BS is from the same mob that quoted the use of the Sahm Rule – earlier this year – as a better indicator as to when Australia has entered a recession rather than the use of two negative quarters of negative growth (GDP).

Today’s Matusik Missive holds three tables and four charts.

Bear with me, it won’t take too long to digest, however, there is a definition or two, which will shine some light on why the ABS unemployment figures are a crock and why we are already in a recession.

1.  Dwelling values

Table 1 shows that median dwelling values haven’t fallen that much since interest rates started to rise – down just 2% across the country since March this year – and during the June quarter they have risen by 2%.

This is partly because some 27% of home buyers over the past twelve months, haven’t borrowed money.

According to the tax office some 58,000 people have downsized over the past five years and have placed monies – on average $250,000 – into their superfunds.

Another reason for the tight housing market is that the supply of homes for sale remains tight.  See table 2.

The third, big reason, is strong demand.

This was fuelled initially by the pandemic – if you restrict people’s movements, they end up spending most of that time at home, and for many their abode has now become something more, resulting in the want to have something better and/or to keep what they have – and now, by higher overseas migration.

Before we move on to the next topic, here is a nugget of intel worth remembering – on average, and when using a decade long sliding scale (it took some work to figure out peeps!) – for every 100,000 new immigrants to Australia dwelling values rise by around 1%.

Given these three drivers it is little wonder rising interest rates have had little impact on Australia’s housing values.

2.  Unemployment

According to the ABS labour force data, Australia’s current unemployment rate is 3.6%, with a further 6.4% people ‘underemployed’ – i.e., those people who are in part-time work or ‘freelancers’ who are looking for more work.

Yet the business sections of the national newspapers these days are chockfull of businesses placed in administration; staff layoffs and hiring freezes.

I know quite a few people – down in Tassie and also on the mainland – that are looking for work (and/or more hours) but cannot even get an interview.  True most are over 50 years old, but still.

There is plenty of evidence to suggest that AI – the algorithm – used by many recruitment firms and the bigger companies are tossing aside qualified candidates.

Maybe it is time to go back to the past and ask for – in one page – why a candidate would be good at the advertised job.  And then the employer – yes, a human – actually reads the applications.

If you do this, I reckon you will find staff.

But I regress.

Table 3 – for mine – shows the real state of play when it comes to Australia’s unemployment and underemployment rates.

This data is from Roy Morgan – the only national labour force figures – again for mine, that you can trust.

Their latest data suggests that Australia’s unemployment rate is 9.1% and underemployment is 9.3%.    Moreover, some 400,000 are worse off, employment wise since interest rates started rising in May last year.

Now that passes the pub test.

But I will let you make up your own mind.


The Roy Morgan survey on Australia’s unemployment and underemployed is based on weekly interviews.  Some one million people have been interviewed since this poll started in 2007, and their latest survey covered about 6,000 telephone and online interviews in June 2023.

According to the Roy Morgan survey a person is classified as unemployed if they are looking for work, no matter when.

Households selected for the ABS survey are interviewed each month for eight months, with one-eighth of the sample being replaced each month.

The ABS classifies a person as unemployed if, when surveyed, they have been actively looking for work in the four weeks up to the end of the reference week and if they were available for work in the reference week.

The ABS classifies a person as employed if, when surveyed, a person worked for one hour or more during the reference week for pay, profit, commission or payment in kind, or even if a person worked for one hour or more without pay in a family business or on a farm.

And it is for these reasons why the ABS unemployment estimates are different from the Roy Morgan unemployment estimate.


3.  Inflation

Inflation is already falling, rapidly in fact, not only here but across many other countries.  See chart 1.

The inflationary pulse is over, with most the pandemic supply chain issues resolved.

Yes, there is still price gouging going on, plus there is way too much ‘greenflation’ and also excessive government spending but the current drivers of inflation have little to do with consumer exuberance.

Most people have pulled back their discretionary spending, and those that haven’t are not impacted that much – if at all – by rising interest rates.

Some are now talking about a wage price spiral.  Oh, give me a break!  The current wage increases are a lag indicator – they are catchup (and they won’t get there) – for past inflation.  See chart 2.

We are very unlikely to go back to the 1970s, which some economic talking heads are waxing lyrical about of late.

The long-term, wider view of inflation is that it is likely to fall due to technology, globalisation and demographics.  This why inflation was so low before the pandemic, and I think we will go back there sooner than many think.

On its way down, inflation might get stuck at around 3% to 4% for a period of time, but I think we will be back to very low inflation rates within the next five years or so.

We will need access to money and affordable rates to change our businesses (and keep people employed) given the onslaught of AI, immigration and shifting demographics.

The next big and consistent movements in interest rates – again if you ask me – is likely to be down.

4.  Recession

According to the Roy Morgan unemployment data and when using the Sahm Rule we are already in recession and have been so since the beginning of this year.

Any further hikes will just dig the Australian economy into a deeper hole.


The Salm Rule identifies the start of a recession when the three-month moving average of the national unemployment rate rises by 0.50% or more relative the its low during the previous twelve months.


Chart 3 suggests – again using Roy Morgan’s unemployment survey results – that Australia has been in recession three times over the past decade.  Chart 4 shows the Salm Rule but using the ABS unemployment results.

Chart 3 also passes the pub test, chart 4 not so much.

End note

RBA enough already, stop rising interest rates!

Now that wasn’t too painful was it?


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Two ways

Most of the time – well almost always – when you hear about a change in dwelling values it reflects prices achieved at sale.

Homeowners often misinterpret what this means to them.

Many think, that, if say – the median value of dwelling sales fell by say 5% over the past twelve months (for example) – that their home is worth 5% less.

Yet, over the past twelve months there was about 490,000 dwelling sales across the country, which represents a turnover of about 4.5% of Australia’s dwelling stock, which as of March this year totalled just over 11 million homes.

On average – over the past decade – about 5% of Australia’s dwellings sell each year.  It fell to just under 4% during the initial Covid period and rose to 6% in late 2022 (the last housing market peak).

So, when the various housing price results are released, they firstly are based on the price achieved at sale compared to a corresponding previous time frame plus, secondly, they are based on a small proportion of the total dwelling stock.

Table 1 and chart 1 show the most recent ‘full’ results of this nature – that is a change in value based on sales activity.

This suggests that dwelling values fell by 7% across our capital cities over the past twelve months and they didn’t move much apparently across the regional markets when the results are compiled into one value.

Across the country, using the sold method, housing values fell by $34,250 to $665,000 median price or down -4.9% when compared to twelve months ago.

Yet there is another way to measure what is happening with housing values and this involves a price estimate across all dwellings, not just that those that have sold during a survey period.

See table 2 and chart 2 for the most recent dwelling value estimates for all dwellings by state or territory across the county.

This indicator suggests that all dwelling values fell by just -3.7% over the past twelve months.  Revisit table 2.

Chart 2 shows that the estimated average value of all dwellings across the country is currently $896,000, which is down from $930,600 in March last year.

For mine, the all dwellings results, are more meaningful to far more of us – especially those that aren’t looking to sell in the near future, than the narrower sales results.

Moreover, the RBA and the banks should be using the all dwelling indicator during the deliberations and assessing financial matters.


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Since 1788

Few words this week, just two tables and a chart.

And according to ChatGPT (with some edits) … Australia’s population experienced a significant boom in 1971 – (with a 535,000 annual increase in our population (the highest, so far on record – see our chart) – for several key reasons.

Firstly, the introduction of the Migration Act in 1966 facilitated increased immigration, attracting a diverse range of skilled migrants and their families.

Additionally, the post-war baby boom generation reached adulthood during this period, resulting in a surge of births.

Plus improved healthcare and living conditions also contributed to higher life expectancy, leading to a natural increase in population.

Australia’s stable political climate and favourable employment opportunities further enticed individuals from around the world to migrate, ultimately driving the population boom in 1971.

And table 2 suggests that whilst Australia’s annual population growth rate for fiscal 2022/23 is expected to reach 524,500, it will still fall short of the 1971 result.

Enjoy the break!


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Top of the world

A few weeks back I wrote about how older Australian’s are behind much of the increase in spending over recent years.

A few peeps took offence, but most that replied to that Missive agreed.

Since then, further studies show a similar trend, and one bit of interesting data is that around a quarter (27%) of new dwelling purchases over the past twelve months did not involve a mortgage.

Older and in general wealthier Aussie’s are buying homes (and also, largely, driving inflation).

Without wanting to sound like a broken record, but lifting interest rates will do little to reduce inflation without smashing the whole economy.

Rising rates further is akin to using a sledgehammer to crack a nut.

But enough already!

This week’s post is data heavy, comment light.

There are two tables this week.

The first table shows you what $1 AUD million buys you at the top end of the apartment market across a range of selected world cities.

The second dataset outlines past – and my projected potential annual growth rates (guesstimates really) – for top end apartments across five Australian cities.

Also – for those interested – I last wrote about the top end of town here and here too.


We are talking about the top end of the apartment market, not an average apartment in a massive “me-too” tower block.  Think boutique project, one or two apartments per floor, absolute waterfront or park front and prime 4Fs – fixtures, fittings, finish and facilities.  Statistically the top 5% of apartment sales by sales price in each location.



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16 charts

I work on several annual retainers for housing related businesses across Australia.

Whilst there are some caveats and restrictions on trade, my bank account tells me it is worth the handcuffs.

A couple of these gigs are confidential – that is I supply my analysis and opinion undercover – whilst two in particular are more of an open affair.

These two include Harcourts across Australia and Kollosche on the Gold Coast.

This missive holds the 16 charts I used at my Australia housing market overview presentation at the recent annual Harcourts conference on the Gold Coast, where I did catch up with the folks at Kollosche too.

With permission, Harcourts has allowed me to share these 16 charts with you.


My end notes

Despite what the RBA did today – being another 0.25% lift in the official cash rate – the next major direction in the Australian cash rate is down.   The first fall is likely by the end of calendar 2023 and I expect the cash rate to be around 2.5% by the middle on 2024.   That’s over 1.5% less than it is now.

Notwithstanding the recent interest rate hikes, the Australia housing market remains strong.

It speaks volumes to me – but obviously not to the RBA – that after 12 hikes in 13 months and as a consequence mortgage holders with a $750,000 variable home loan are paying around $2,000 more per month that the generic housing market across the country is not slowing down.  I outlined some reasons why here.

Anyhoo, back to the main story…sales volumes may be down on last year, but they are on average at the same level for detached houses are they were during the past decade and apartment sales are rising.

One big factor that is keeping the housing market strong is the lack of supply – that includes property for sale, for rent and under construction too.  This might change for resale listings, but it will be hard to resolve over the short to medium term for renters and new home builds.

Australia’s population growth rate is also expected to increase, and I think the projected ‘official’ annual increase over the next decade is light.  I wouldn’t be surprised if we saw an annual increase of over 450,000 new people across the Australia over the next five years or so.

All things being equal – that is to say that things don’t go stupid on the wider world scene (but you can never tell these days) – then calendar 2024 and 2025 are likely to be better years for real estate downunder.

I think that housing prices could rise between 3% and 5% each year over the next two years, then plateauing for some time and weekly rents could escalate by 5% to 10% per annum over the same time frame.

Without giving the RBA head honcho any credence – and big noting a bit here I have been saying this for yonks – many renters will be forced to share digs or move back in with family.  Rarely fun for the parties concerned.

Ditto homes for sale that can accommodate more people per title are growing in demand and price.


All 16 charts posted in this Missive are the property of Harcourts.  You can look but not touch.  I might forgive any breach but well Harcourts won’t.

Plus, I am still available to work on a project advice commissions, housing outlook and need studies and select project support roles.  My handcuffs aren’t that tight, so don’t be shy.  If you think I can help, give me a bell via the link here.


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