Featured Article - Migration Tsunami
MIGRATION TSUNAMI: GET ON FRONT FOOT NOW, DEVELOPERS URGED
The effect of the increase in
migration will likely be felt right across the property sector.
An influx of more than 1.5 million migrants into Australia over the next five years will boost demand for both build-to-sell and build-to-rent apartments, especially in Sydney and Melbourne’s middle ring.
She says the solution is “they (migrants) will come, and they will build it”.
Charter Keck Cramer’s research director Richard Temlett says there are abundant opportunities for cashed-up developers to start projects now and take advantage of a constrained market. “Population growth will drive demand for additional and diverse forms of homes, especially in Melbourne and Sydney, with 70 per cent of migrants who come to Australia living in these cities,” he says. Temlett says constrained supply and high demand for properties as a result of migration will translate into high rents and property prices. “The mismatch between supply and demand is going to become worse, but developers will see opportunities within that.” This is echoed by Mitchell Brandtman partner Caitlin Shields who spoke at The Urban Developer’s Brisbane Residential Devleoper Summit last week. Shields says migration is a double-edged sword that will provide labour force for an undersupplied subcontractor market, while also creating more demand for housing products.
Migration will bring opportunities, but not just any development will cater for the demand. Temlett says he is not concerned developers will knock- up poor quality buildings in response to strong demand for properties as a result of rising migration. “People won’t buy or rent places if poor quality or the wrong types of homes are built. The market will decide what it is prepared to accept and this will help drive activity in the build-to-rent space. “If they are well capitalised, developers can start building out some of these projects and deliver stock into a market where there is going to be a low level of competition because other developers can’t proceed.”
14 – June / July 2023
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