Immigration will be a key driver for house and land developers, who are calling on the federal government to “turn on the tap” and reinstate international travel.
Dennis Family Corporation managing director Grant Dennis, who spoke at The Urban Developer’s Greenfield Residential vSummit today, said the HomeBuilder had pulled forward their sales but without international migration in the near future the greenfield development market would suffer.
“Historically 50 per cent of demand is from natural increase, the other 50 per cent is from overseas migration,” he said.
“The net overseas migration is zero—50 per cent of our housing demand historically has evaporated. The other 50 per cent has been pulled forward from the various stimuluses from around the states.
“If 50 per cent of our normal housing demand and the other 50 per cent has been pulled forward, there’s got to be a hole on the other side … we think it’s going to hit in about 12 to 18 months.
“Somewhere down the line you’ve got to pay the piper. We’re going to experience quite a slow down because of the lack of net overseas migration demand and because of the pull forward from HomeBuilder.”
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Research 4 director Colin Keane said the return of expats had helped drive demand and prop up greenfield markets across Australia but a number of markets including Victoria and south-east Queensland were exposed to international migration.
According to Keane, Australia received six years’ worth of returning expats in the past 12 months, which had boosted demand for greenfield development.
But, he warned, 60 per cent of them had indicated they would leave again when borders reopened, which would “put a dent in the market” and drain the underlying demand for greenfield developments in 2023-2024.
In Western Australia, expats have accounted for 73 per cent of land volume sales during the past 12 months, according to Keane.
“Australians will leave again and therefore the impact of expats will go into reverse,” he said.
“Expat numbers are going to fall through the floor if the federal government opens the borders again.”
Mirvac head of residential Stuart Penklis agreed with Dennis’ view that the federal government needed to “turn on the tap” for international migration to help shore up ongoing demand.
