Australia and New Zealand have moved to the top of the global league table for population growth in developed countries, with significant implications for each country’s property market.
New CBRE research found that net migration for 2023-2025 in both countries is expected to reach historic highs, which will have a major ripple effect for the property sector – particularly the Australian residential market.
Research co-author Craig Godber said that the higher net migration forecast for 2023-2025 alone suggested demand for an additional 408,000 dwellings in Australia.
“The current national vacancy remains at a near record low of 1.4%, with the major capitals all in severe undersupply. This has resulted in double digit annualised rental growth. With the supply outlook remaining constrained it is difficult to envision any significant relief to tight rental market conditions over the next few years at least,” Godber said.
Both countries will also need more logistics and office space – with CBRE forecasting an extra 4,460,000sqm of logistics space and 1,180,000sqm of office space will be required in Australia alone.
Pro-immigration policy settings and the ability of both countries to attract migrants have been a key driver of the revised forecasts.
The recent Federal Budget significantly increased the net migration outlook for Australia for 2022-2025 to 975,000, up from 705,000 just six months earlier.
In New Zealand, even with slowing monthly net gains as the current flow of pent-up migration arrivals passes, and emigration to Australia increases, net migration is expected to hit a historic peak of 90,000 this year and an aggregate 210,000 to 2025.