Australia’s property market has been powering ahead at a pace few expected — and one of the strongest forces shaping this boom is migration. From international students to skilled workers to returning expats, the steady flow of new arrivals has reshaped demand, tightened supply, and intensified competition across both rental and ownership markets.
At Next House—Smart Property Investments, we closely track these demographic shifts because they play a significant role in long-term value growth. In this article, we examine how migration is reshaping Australia’s housing landscape, the challenges it poses to supply, and the implications for buyers, investors, and renters.
A Population Surge After the Border Reopening
The population of Australia surged in a massive increase when it opened its borders following COVID-19. Millions of newcomers came to the country, most of them students, workers and families; the main locations were Sydney, Melbourne, Brisbane and Perth.
Migration affects housing demand immediately:
- New arrivals need accommodation from day one.
- Most start in the rental market
- Many transition to buying within a few years
- Larger migrant families often seek bigger homes.
This instant pressure on rentals quickly flows into the broader market, driving up both rents and purchase prices.
Rent First, Buy Later: How Migrants Move Through the Market
Migration doesn’t influence just one segment of the market—it impacts every stage.
Stage 1: Rental Demand Surges
Most migrants begin by renting, which increases:
- Competition for apartments and units
- Rental prices at record levels
- Vacancy rates falling to historic lows
Cities such as Melbourne and Brisbane have seen rental stress due to large-scale migration-driven demand.
Step 2: Change in home ownership
As immigrants settle into work and social life, many turn to shopping. It pushes:
- Higher first-home-buyer activity
- Stronger demand for townhouses and affordable units
- Increased investor returns due to high rental yields
- More competition across entry-level home segments
This migration cycle introduces reliable, ongoing buyer demand — a key pillar of long-term price growth.
Supply Isn’t Keeping Up — The Core Issue
Migration isn’t the problem. The real challenge is housing supply.
Australia has been under-building homes for more than a decade. Recently, the pace has slowed even further due to:
- Labour shortages in construction
- Rising material and labour costs
- Delays in planning approvals
- Developer hesitancy and higher financing costs
- Ongoing supply-chain disruptions
This combination has created a severe structural housing shortage.
When you combine:
- Rapid population growth
- Limited new housing
- Rising rental demand
…the outcome is unavoidable: higher property prices, higher rents, and tighter market conditions.
Major Cities Feel the Pressure Most
Migration drives change across Australia, yet specific regions feel the impact more heavily as soaring demand, tight supply, and rapid population increases amplify market pressures.
Sydney & Melbourne
- Primary landing destinations for new arrivals
- High demand for rentals and multi-density housing
- Quick price rebounds as population grows
Brisbane & Perth
- Strong pull for skilled workers and interstate movers
- Growing job markets
- Rapid rent and price increases due to tight supply
Regional Areas
Even regional markets are benefiting through:
- Spillover from the capital city pressure
- Remote work flexibility
- Families and retirees seeking space and affordability
Migration isn’t just reshaping cities—it’s reshaping the entire national housing map.
Smaller Household Sizes Add Extra Demand
Migration is just one factor; Australia is also experiencing broader demographic shifts:
- More single-person households
- An ageing population
- Fewer shared households
- Limited social and affordable housing supply
Even without migration, demand for homes would still be rising. Migration simply amplifies this pressure — and accelerates it.
Is Migration the Main Cause of the Housing Boom?
Migration is not operating in isolation, and it is one of the strongest forces behind the current boom. The fact of the matter is that the supply and demand have always been mismatched.
Migration did not cause the new issue; it only showed the extent of the shortage in supply.
Weak level of construction + population growth = sustained growth in price.
The demand will keep on pushing until Australia constructs a lot more homes because of migration-driven demand:
- Prices higher
- Rents higher
- Competition higher
Final Thoughts: A Boom With Staying Power
The housing boom in Australia is not just a short-term cycle – it is a structural shift. Migration is fundamentally reshaping demand, and unless the supply imbalance is addressed, the country will continue to experience:
- Low vacancy rates
- Tight rental conditions
- Strong capital growth
- Rising property values across cities and regions
For investors, this creates a long-term opportunity. For renters and first-home buyers, it presents real challenges. For policymakers, it highlights urgent supply issues.
What’s certain is this: migration isn’t slowing down — and neither is Australia’s need for more homes.
