“Low immigration due to COVID-19 will not impact house prices”, explains immigrant and property expert Zaki Ameer
Announcement posted by Dream Design Property - DDP Property 12 Oct 2020
In recent weeks, several property experts have suggested that Australian property prices could drop during the Covid-19-related pause in migration.
But not Zaki Ameer, founder of buyer’s agency, DDP Property, who emigrated to Australia as an international student over 20 years ago.
Why new immigrants don’t want to buy a home
Based on his first-hand experience and knowledge, Ameer believes that a significant drop in new arrivals will have no negative impact on short or medium-term housing sales or prices.
“Economists aren’t aware that most immigrants who arrive to Australia are not considering buying a home any time soon. They simply don’t have the money or security required by the banks to buy a home. Especially in Australia where prices are above most international markets. In addition, many immigrants are forced to spend their life savings getting their families to Australia - some to escape war or persecution, and others to look for higher paying jobs or study in Australia in promise of a better life.”
Ameer understands first-hand the challenges migrants face along the road to home ownership. It took almost seven years for him to overcome “a new culture with few friends, no income and significant debt” before finally buying his first property.
“During my early years in Australia, I moved six times from one accommodation to the next. I was struggling to pay $90 a week while working and studying.”
What about immigrants who have enough money to buy?
After two decades building personal and professional relationships with skilled and unskilled immigrants from around the world, Ameer says they all have one thing in common – a need to live somewhere they feel comfortable.
“Contrary to the idea that wealthy immigrants land in Australia and snap up property, those with money almost always want to rent in an area first. Like anyone moving into an unfamiliar world, they don’t want to buy unless they are sure they have a network of family, friends and colleagues who they are comfortable around, and can rely on. That level of security and trust often takes several years to build.”
This is why Ameer believes new reduced immigration numbers will have little bearing on house prices.
“The majority of migrants buying today, or even next year, have been living and working in Australia for at least three years. They’ve worked hard, saved money and are excited about the low interest rates and government grants available to residents. In many ways, it’s never been a better time for them to buy property.”
A rare opportunity for every home buyer
Ameer says that the temporary low number of permanent arrivals over the coming six months provides an opportunity for every home buyer or investor.
“Immigration already adds hundreds of millions in GDP to Australia’s economy and prosperity. Once our borders open up again, the government will be incentivising immigrants to come to Australia.”
He expects this will lead to a spike in renters, greater demand for properties and the end to the attractive incentives currently available to first home buyers.
“With Australia’s population expected to grow to 38 million by 2050, the next three to twelve months are likely to be the most affordable for decades.”
“I forecast that it won’t be long before we have increased property prices , given the diligent handling of the pandemic in Australia compared to the rest of the world. That will only make Australia an even more attractive country for migrants to want to live.
- Australia’s net migration div has exceeded 180,000 every year since 2006
- In 2020/21, the government expects an increase of just 36,000 people.
- By 2050, migration will boost Australia’s population by 14 million, contributing $1.6 trillion to the GDP.
- Soon 40% of the Australian population will rent (up from 32% in 2019), due to affordability issues and lifestyle choices.