The Cities Where House Prices are Set to Soar Due to Record-high Immigration – As Finance Guru Mark Bouris Sensationally Backflips on Grim Prediction
By Stephen Johnson
Australian house prices are expected to soar over the next two years because of record-high immigration and a very tight rental market.
Yellow Brick Road executive chairman Mark Bouris said high immigration would particularly benefit Australians wanting to invest in property.
The mortgage broking tycoon told Daily Mail Australia ‘for investors it definitely is’ a good time.
The property market is recovering despite 12 interest rate rises since May 2022.
Mr Bouris said high immigration would particularly benefit investor landlords – at the expense of renters – with the national vacancy rate at a very tight 1.2 per cent.
HOBART: A 14.2 percent increase in the year to June 2025 – taking median house price to $835,362
MELBOURNE: A 12 percent increase in the year to June 2025 – taking median house price to $1.080million
SYDNEY: A 10.3 percent increase in the year to June 2025 – taking median house price to $1.529million
CANBERRA: A 9.4 percent increase in the year to June 2025 – taking the median house price to $1.090million
PERTH: An 8.8 percent increase in the year to June 2025 – taking the median house price to $726,261
ADELAIDE: A 6.8 percent increase in the year to June 2025 – taking the median house price to $804,996
Sources: KPMG, CoreLogic
‘All it’s going to do is put more pressure on rents, upward pressure, so investors… are definitely interested in buying property and renting it out,’ he said.
‘There is nowhere, unfortunately, for these people coming to Australia to live and most of them have to rent initially.’
A record 454,400 migrants moved to Australia in the year to March, with international students returning in droves as recruiters hire skilled migrants to fill labour shortages.
This is already higher than Treasury’s Budget forecasts of 400,000 new permanent and long-term overseas arrivals in the 2022-23 financial year.
The federal government is expecting 1.5million foreigners to move to Australia in the five years to July 2027.
With inflation still on the high side, interest rates are expected to stay on hold throughout 2024 and into early 2025 at the present 11-year high level of 4.1 per cent.
Despite that, KPMG’s Residential Property Market Outlook report is forecasting a surge in property prices from the end of 2023, which would continue into mid-2025 because of record-high immigration.
‘The post-pandemic recovery in immigration is expected to add significant pressure to housing demand,’ the report by economists Brendan Rynne and Brian Tran said.
‘Robust population growth and limited housing supply are poised to exert more pressure on the rental market.’
Hobart is predicted to see the highest growth in property prices as smaller capital cities receive more interstate migration than other parts of Australia.
Hobart house prices were expected to fall by 3.5 per cent in 2023 but recover next year to be 6 per cent higher in June 2024, jumping to 11.3 per cent by December 2024 and 14.2 per cent by June 2025.
This would see the median house price rise from $690,085 to $835,362.
Melbourne, another city receiving a big share of new foreign arrivals, is forecast to see property prices rise by 12 per cent by June 2025.
That forecast would see Melbourne’s mid-point soar from $918,971 in June this year to $1.080million by mid-2025.
Sydney, which receives a bigger share of new migrants, was expected to see its median house price climb by 6.2 per cent in the year to December 2023.
The annual growth was expected to slow to 4.7 per cent by June 2024 but rise again to 6.6 per cent by December 2024 and surge to 10.3 per cent by June 2025.
Should that prediction materialise, Sydney’s median house price would grow from $1.324million in June 2023 to $1.529million by mid-2025, based on CoreLogic data.
Canberra house prices were expected to rise by just 1.2 per cent in 2023, but accelerate to 4.4 per cent in June 2024, 7 per cent in December 2024 and 9.4 per cent by June 2025.
This would see median house prices in the national capital rise from $954,079 to $1.090million.
Perth house prices were expected to soar by 8.2 per cent in 2023, before the annual growth pace rose to 8.4 per cent in June 2024, 8 per cent in December 2024 and 8.8 per cent by June 2025.
This would see the city’s mid-point house price rise from $615,793 to $726,261 in just two years.
Adelaide, one of Australia’s strongest-performing housing markets, was expected to enjoy a 6 per cent increase in 2023, followed by a 5.8 per cent rise in June 2024, a 5.6 per cent rise in December 2024 and a 6.8 per cent increase in June 2025.
This would see Adelaide’s mid-point house price rise from $712,421 to $804,996
Darwin in Australia’s tropical north was expected to buck the trend, with prices falling by 3.98 per cent in 2023, before dropping by another 1.5 per cent in June 2024, but rising by 2.5 per cent in December 2025 and by 5.1 per cent in June 2025.
The price increase over two years would be more modest, rising from $585,782 to $606,422.
Brisbane house prices were expected to climb by 3.7 per cent in 2023, slowing to 2.8 per cent in June 2024, 2.6 per cent in December 2025 before edging up to 4.2 per cent in June 2025.
This would see the city’s house price climb from $806,781 to $864,204.
Mr Bouris said he’s no longer worried about mortgage stress where borrowers can’t pay their bills leading to forced sales as ultra-low two percent fixed interest rate periods expired.
‘Initially, my thesis was it would, but it hasn’t happened,’ Mr Bouris said.
‘We’re in the middle of the cycle of people having to go from fixed to variable and there hasn’t been any marked increase, in terms of arrears and delinquencies.
‘There’s been a slight increase, but it’s still historically low so just on my own business, we’re seeing a couple of hardship requests – maybe four or five, I’m not talking about hundreds or thousands.
‘I’m not seeing any mortgage stress at the moment.
‘People have accumulated savings, people have got two or three jobs and an extra job or extra hours, unemployment is really low (3.7 percent) relatively speaking.’
Mr Bouris said history would also kindly judge former Reserve Bank governor Philip Lowe, who finished up on September 17.
‘A lot of people criticised the RBA governor, the outgoing one – maybe time will tell he was pretty competent given where inflation seems to be heading at the moment,’ he said.
Inflation in August rose to 5.2 percent, up from July’s 4.9 percent, but it’s well below the 32-year-high level of 8.4 percent reached at the end of 2022.