In April, headlines across the country - and around the globe - announced that 650,000 migrants were forecast to arrive in Australia over the next two financial years. 

This is believed to be the biggest two-year migrant spike in the country's already heavily multicultural history.

As well, the announcement came after it was already well known that Australia had experienced a "migration boom" since COVID borders opened again in early 2022 - with about half of these migrants being international students, mainly from China.

Yet at a time of rising cost-of-living expenses, interest rate increases, a rental crisis, and a continuing lack of housing, the news of a migration boom was understandably not welcomed by potential home buyers - or the Australian population overall.

Thus, the big question everyone is asking is "Can our already pressured property market handle this new pressure?"

Short answer: possibly (we may have no choice) - but with difficulty.

And don't expect property prices to drop.

Let's take a look.

Migration boom: property supply 

Monash University Associate Professor of demography, Rebecca Kippen, recently told News Corp that housing affordability and availability were "perennial problems in Australia". 

"As the population grows, and average household sizes become smaller, we continue to need substantial increases in housing supply,” Dr Kippen said.

Along with La Trobe University community planning and development lecturer, Kiran Shinde, demographer Simon Kuestenmacher commented that the housing sector would be the area most affected by the migration boom, particularly as demand outweighs supply.

“The main story here is we need to build our way out of this, we need to develop housing like crazy, and quite a bit of changes need to happen systemically in Australia,” Mr Kuestenmacher said.

But as Metropole's Michael Yardney recently said, building new properties swiftly and cheaply is virtually impossible.

"It takes quite some time to build new houses (up to a year) and much, much longer to build the many apartment towers we require to provide more medium-density living in the middle-ring suburbs of our capital cities, where much of the demand is," Mr Yardney explained recently.

"It’s been well documented that supply shortages and the dramatic increase in the cost of construction have caused many builders to go bankrupt ....(with) the cost of building new houses increasing by around 30% over the last couple of years."

"In other words, our housing crisis is likely to persist for many years as strong population growth will not be matched by an increased supply of dwellings."

Migration boom: property prices

With one of the key reasons for unaffordable property prices - and also rental hikes - being the lack of housing supply, Mr Yardney said to expect more price rises due to an "oversupply" of demand.

"The extra half a million people who will be coming over the next year or two have to live somewhere, and they don’t bring houses with them," he said.

Mr Yardney said the number of building approvals has also slumped to around its lowest level in a decade.

As well, the 70,000 new dwellings that we've "barely built" since the pandemic began, represents the minimum figure needed every year just to keep up with the demand over the next two to three years, Custodian managing director, James Fitzgerald said in May 2022.

"A surge in demand and lack of supply only leads to one outcome – rents and values increasing," Mr Fitzgerald said.

Migration boom: why we need it

Despite all these negative points, migration can offer Australia what it's always asked for when it comes to overseas influxes - skills.

Australia argued for "population or perish" in the years after World War II for exactly this reason with the country welcoming two million migrants between 1945 and 1965.

In 1949-1974, the Snowy Hydro-Electric Scheme comprised more than 65% of migrants from over 30 countries.

In the same way, today's migration boom could help Australia, particularly smaller cities and regional towns sorely in need of skilled workers.

Australia's rapidly ageing population - one of the most pressing concerns for Australia - is also a key reason why additional and younger workers are needed throughout the country.

Mr Yardney said the ageing population would significantly challenge the nation's social welfare and healthcare systems, as well as overall productivity and economic sustainability.

"High levels of immigration can help mitigate these challenges by bringing in younger, working-age individuals who can contribute to the workforce, bolster the tax base, and help support the growing needs of the ageing population," he said.

"By welcoming skilled migrants, Australia can address these shortages and strengthen its competitive advantage in the global market."

There have certainly been concerns that recent migrations comprise largely overseas students and those on visitor visas, along with how to attract even permanent migrants to the regional towns and areas where they are badly needed.

However, there is little doubt that skilled migrants prepared to stay could help Australia with its employment needs - even though the property market will most likely suffer.

And there are plenty of Australians who agree with Mr Yardney's views on having a skilled migrant base.

In a Send Money Survey of 1,002 Australians in February, 84% of people agreed that the federal government's increased Migration Program could bring at least one benefit to the country: a more positive economy.

According to the Australian Broker: "More than 53% said they believed new immigrants filling skilled jobs would help solve Australia’s pressing labour shortage, while 48% believed the (migration) program would bring an overall boost to the Australian economy through increased spending by immigrants."

At the same time, 92% of people surveyed believed the increased program would disadvantage Australia with 65% naming increased house prices and rents.

Certainly, there is no quick fix to either Australia's lack of housing supply - and its liveable land overall - or its strong housing demand.

So, in a word, there is no quick fix, with the country's housing crisis not going away any time soon, said Mr Yardney.

At the same time, Australia has grown to where it is today on the back of a multicultural population.

From the 1850s Gold Rushes to WWII and the Snowy Hydro-Electric Scheme right up until beyond a pandemic, Australia has one of the highest numbers of migrants (26%) of all major western countries.

Indeed, it eclipses even other "high-immigration nations" such as New Zealand (23%), Canada (22%), the United States (14%), and the United Kingdom (13%).

And since 1945, seven million permanent migrants have settled in Australia.

So, who knows what the future might hold now, for both our property market and our new migrants?

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