Overseas property seekers are surging back into Australia, with potentially crushing consequences for an already struggling rental market.
PropTrack’s Overseas Search Report for November 2022 shows property searches by those outside the country are now at their highest levels since the start of the Covid pandemic.
Karen Dellow, senior data analyst at PropTrack, said people from a variety of countries are hunting down homes.
“Approximately three-quarters of buy and rent searches come from the United Kingdom, United States, and New Zealand,” Ms Dellow said.
“Although the volume of searches from India continues to increase.”
The number of people from overseas looking for a home in Australia has surged. Picture: Getty
The lifestyle appeal of the Gold Coast makes that city one of the top-searched, with major capitals also sought-after thanks to job and education opportunities, Ms Dellow said.
Overseas buyers favoured homes on the Goldie, followed by dwellings in Melbourne, Sydney, and Brisbane.
Meanwhile, renters were searching mostly in Melbourne, followed by Sydney, Brisbane, and then the Gold Coast.
“The largest increase in rental searches comes from India, up by 159% year-on-year,” Ms Dellow said.
“Although, all the top countries have seen double-digit growth, with the UK, New Zealand, and China experiencing close to 100% increases.”
What does this mean for renters?
It’s well documented that Australia’s rental market is extremely tight, with the national rental vacancy rate sitting at just 1.6% in September 2022 – an historic low.
“The house rental vacancy rate sat at 1.1%, slightly above its historic low. The unit rental vacancy rate was 2.5%, which is a record-low,” said Cameron Kusher, director of economic research at PropTrack.
“New rental listings were also low in both capital cities and regional areas. In September 2022 new listings were 9.9% lower year-on-year in capital city areas and 18% lower than their decade average.”
With insufficient stock to service the market, rental prices are being driven up sharply, with median weekly advertised rents increasing by 4.3% over the September 2022 quarter to be 10.3% higher year-on-year.
That’s the strongest rate of growth seen in seven years.
The rental crunch is also being reflected in the number of days a property remains listed for rent, Mr Kusher said.
“In September 2022, the median number of days a property was listed for rent on realestate.com.au was at an historic low of 19 days,” he says.
“This has been bouncing between 19 and 20 days for the past eight months and is lower than the 22 days recorded at the same time last year.”
Where to from here?
With immigration to Australia ramping up, and people who left capital cities during the pandemic returning, there appears to be no immediate ease on Australia’s rental market pressures.
“Our two biggest rental markets – Sydney and Melbourne – are seeing people that left during the pandemic return,” Mr Kusher said.
“In addition, most overseas migrants to Australia settle in these cities. These factors are likely to keep demand for rentals heightened, while supply of rentals is expected to continue to recede.”
Source: www.realestate.com.au
