Wednesday 23 November 2022 02:47 AM Why a return to pre-Covid immigration levels will push up house prices in ... trends now

Wednesday 23 November 2022 02:47 AM Why a return to pre-Covid immigration levels will push up house prices in ... trends now
Wednesday 23 November 2022 02:47 AM Why a return to pre-Covid immigration levels will push up house prices in ... trends now

Wednesday 23 November 2022 02:47 AM Why a return to pre-Covid immigration levels will push up house prices in ... trends now

Australian house prices will start rising again in 2024 because a return to pre-pandemic immigration levels will spur demand for real estate, a credit ratings agency says.

The major banks are expecting property prices to decline in 2022 and 2023 as more Reserve Bank interest rate rises limit the lending capacity of banks.

But Moody's Investors Service predicts a gradual increase in immigration to pre-Covid levels will boost demand for homes, especially in Australia's biggest cities Sydney and Melbourne that relied more on population growth before the pandemic.

'We believe there are still sound fundamentals for the residential sector beyond the next one to two years,' it said.

Australian house prices will start rising again in 2024 because the recovery of immigration to pre-pandemic levels will spur demand for real estate, a credit ratings agency says (pictured is an auction in the Melbourne suburb of Glen Iris)

Australian house prices will start rising again in 2024 because the recovery of immigration to pre-pandemic levels will spur demand for real estate, a credit ratings agency says (pictured is an auction in the Melbourne suburb of Glen Iris)

'The strong recovery in net overseas migration in fiscal 2022 and our expectation that it will reach pre-pandemic levels in fiscal 2023 will push population growth rates close to long-run averages.'

The credit ratings agency noted high immigration had long been the main reason for rising house prices. 

'Population growth has been one of the key drivers of new dwelling demand in Australia, with net overseas migration historically accounting for more than 50 per cent of demand,' Moody's Investors Service said.

'Property prices and volumes continue to decline as rates rise but population growth and limited supply will support longer-term fundamentals.'

Australia's net annual immigration rate stood at 194,000 in 2019-20, the last financial year covering the period before the pandemic.

The closure of Australia's border in March 2020 saw the population shrink during that year, in the September quarter, for the

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