Migration’s shocking impact on Adelaide house prices exposed – realestate.com.au

Controlling migration would have an immediate impact on runaway house prices, an expert says, and would do so faster than simply tackling housing supply problems.

FoundIt’s head of research Kent Lardner said migration has fueled house price growth across South Africa, and that too much of the political discourse around the housing market in recent years has focused too much on supply alone, without paying attention to demand factors such as migration.

“When we define the market, the whole story is about supply,” he said.

“Since Covid, there has only been one issue discussed regarding house prices, and that is supply. In reality, anyone who took economics in high school knows about supply and demand.

“One thing we can control is the demand from migration.”

Mr Lardner said a return to pre-Covid population growth would ease pressure by 2 to 3 per cent a year.

“That means a market that was supposed to grow 5 percent this year would only grow 2 percent,” he said.

“It has a huge impact. It may not sound like much, but the annual change in growth is substantial.”

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Mr Lardner said migration within the state was out of control, but migration overseas was.

“Migration must be linked to housing supply,” he said.

“Once we have completed the offer, we can further open up the country.

“The policy must adapt.

“We can bring in people, but only at a volume that matches our housing supply.”

Mr Lardner said that when more households are added than new homes are built each year, demand pressure does not spread evenly and is concentrated in more affordable price ranges.

He noted that Adelaide had become the preferred choice of many newcomers, meaning migration was affecting prices.

FoundIt research lead Kent Lardner

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“Migration has had a reasonable impact on price increases in Adelaide,” he said.

In Adelaide he selected five areas where this was most evident.

The first was Elizabeth, where values ​​have risen 14 per cent in 12 months to $610, with more than half of households renting and most spending 50 per cent of their income on it.

Christie Downs has seen 13 percent growth to $720,000; Hackham West – Huntfield Heights values ​​increased 20 percent to $735,050; Salisbury home values ​​increased 15 percent to $740,000, and Smithfield – Elizabeth North home values ​​increased 12 percent to $580,000.

“Suburbs where housing supply is scarce will not be much affected by a change in migration, but as we move into areas with a large supply of new locations, prices are more vulnerable,” he said.

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Ray White Port Noarlunga agent Jackie Scott, who is currently selling a house at 8 Hartland Ave, Christie Downs, said prices had risen sharply due to both demand and older affordable homes being replaced by newer, more expensive stock.

“We are getting multiple offers on each property,” she said.

“The newer ones are going for mid-6 year olds, which is still a lot of money for young people to be able to afford, so a lot of them, especially with current interest rates, feel like they can only go to the high $500,000s, so some of these are becoming out of reach for them.”

Real estate agent Jackie Scott outside the house she is selling at Christie Downs. Photo: Eleni Tzanos

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Ms Scott said migration makes a positive contribution to society, but increased population means greater competition for property.

“That said, the Foreign Investment Review Board’s changes have made it harder for them to buy if they are not Australian residents. They can’t just come in and buy, so there are still opportunities for ordinary Australians to buy,” she said.

– with Aidan Devine