Housing demand, rents fall as overseas migration comes to a halt

Border closures caused by the coronavirus pandemic are expected to impact housing demand by between 129,000 and 232,000 dwellings over the next three years, according to new research by the National Housing Finance and Investment Corporation (NHFIC).
Housing demand in capital cities is typically fuelled by population growth, but the NHFIC estimates Australia’s population could fall by up to 214,000 between 2019 and 2021. This would represent the steepest decline since World War I.
Driving this contraction is the closure of international borders, which has brought the number of people arriving to Australia’s shores to a near standstill.
This has been most keenly felt in the capital cities, where new arrivals tend to gravitate. Last year, 84% of migrants to Australia settled in a capital city, with three quarters opting for Sydney or Melbourne.
The decrease in underlying demand adds to the mounting problems currently facing the construction sector. After about 162,000 homes were built in 2019, the NHFIC estimates this could drop to 137,000 this year, and 108,000 in 2021.
Rents on the way down in inner-city markets
Since 2007, net overseas migration has accounted for nearly 60% of population growth, with international students making up half of that number. So when the flow of migrants comes to an abrupt halt, we can expect property vacancies to increase.
This has put plenty of downward pressure on rents, particularly in inner-city markets. In Sydney, the drop in demand saw advertised rents fall by almost 25% in Darlinghurst and 15% in Haymarket and The Rocks.
In Melbourne, the increase in available rental stock has seen advertised rents in the CBD fall by more than 22%. Meanwhile, advertised rents in Elwood and Southbank have fallen by nearly 20% and 15%, respectively.
How soon international students return will depend on a few factors, with how successful Australia and other countries are in containing the virus high up on the list. As the NHFIC notes, past downturns also provide a few important lessons.
“The global financial crisis (GFC) revealed that economic factors, including unemployment and the exchange rate, are important for international students studying in Australia,” it said.
“It took around four years for student numbers to recover to pre-GFC levels. A protracted COVID-19 recession could easily lead to a similar path of recovery once borders reopen.”
For more information on the property market, head over to our home loans news page. And if you want an idea of where interest rates currently sit, visit our home loans comparison page, or browse the selection below.
Home loan comparisons on Mozo - last updated 8 December 2023
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Featured Product
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Unloan Variable
Owner Occupier, Refinance Only, LVR <80%
interest rate
comparison rate
Initial monthly repayment5.74% p.a. variable5.65% p.a.For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.
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For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.
- interest rate
- 5.74% p.a. variable
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- 5.65% p.a.
- interest rate
- 5.74% p.a. variable
- comparison rate
- 5.65% p.a.
- Upfront fees
- $0
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- $0.00
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- $0.00
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- yes - free
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- no
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- $10,000
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- Variable
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Read our Mozo Review to learn more about the Unloan Unloan Variable
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Home Variable Rate
Owner Occupier, Principal & Interest, Refinance Only
interest rate
comparison rate
Initial monthly repayment6.15% p.a. variable6.15% p.a.Enjoy a competitive variable interest rate from Up. No application, monthly, annual, redraw, or discharge fees to pay. Up to 50 free offset accounts available. Up home loans are only available to owner-occupiers buying or refinancing in major Australian cities. Up is 100% owned by Bendigo Bank. New joiners get $10 by signing up to the app using code UPHOMEMOZO. (T&Cs apply) Mozo Experts Choice award winner.
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Enjoy a competitive variable interest rate from Up. No application, monthly, annual, redraw, or discharge fees to pay. Up to 50 free offset accounts available. Up home loans are only available to owner-occupiers buying or refinancing in major Australian cities. Up is 100% owned by Bendigo Bank. New joiners get $10 by signing up to the app using code UPHOMEMOZO. (T&Cs apply) Mozo Experts Choice award winner.
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- 6.15% p.a. variable
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- 6.15% p.a.
- interest rate
- 6.15% p.a. variable
- comparison rate
- 6.15% p.a.
- Upfront fees
- $0
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- $0.00
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- $0.00
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- yes - up to $30,000
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- Maximum loan to value ratio
- 90.00%
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- $50,000
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- $10,000,000
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- Variable
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Read our Mozo Review to learn more about the Up Home Variable Rate
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- Packaged Home Loan - 2023
Variable Rate Home Loan Special Offer
Package, Owner Occupier, Principal & Interest, LVR<80%
interest rate
comparison rate
Initial monthly repayment6.14% p.a. variable6.51% p.a.Package benefits across Home Loans, Visa Credit Card, Personal Loans and Term Deposits. No package fee for the first year. No application, settlement or redraw fees to pay. Quick and easy application. Free CoreLogic RP Data property reports. *Terms, conditions and lending criteria apply.
CompareCompareVariable Rate Home Loan Special Offer
Package benefits across Home Loans, Visa Credit Card, Personal Loans and Term Deposits. No package fee for the first year. No application, settlement or redraw fees to pay. Quick and easy application. Free CoreLogic RP Data property reports. *Terms, conditions and lending criteria apply.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.51% p.a.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.51% p.a.
- Upfront fees
- $0
- Ongoing fees
- $395.00 yearly
- Discharge Fee
- $350.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- -
- type of mortgage
- Variable
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- Principal & Interest
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- Owner Occupier
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- Weekly, Fortnightly, Monthly
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- $0 package fee for the first year.
Read our Mozo Review to learn more about the Credit Union SA Variable Rate Home Loan Special Offer
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Mortgage Simplifier
LVR<80%, Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment6.14% p.a. variable6.43% p.a.Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws. Winner of Australia’s Best Essential Bank in the Mozo Experts Choice Awards.
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Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws. Winner of Australia’s Best Essential Bank in the Mozo Experts Choice Awards.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.43% p.a.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.43% p.a.
- Upfront fees
- $299
- Ongoing fees
- $0.00
- Discharge Fee
- $250.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- $2,000,000
- type of mortgage
- Variable
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- Principal & Interest
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Read our Mozo Review to learn more about the ING Mortgage Simplifier
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Featured Product
Mozo experts choice awards won:
- Low Cost Home Loan - 2023
Unloan Variable
Investment, Refinance Only
interest rate
comparison rate
Initial monthly repayment6.04% p.a. variable5.95% p.a.For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for investors. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.
CompareCompareUnloan Variable
For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for investors. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.
- interest rate
- 6.04% p.a. variable
- comparison rate
- 5.95% p.a.
- interest rate
- 6.04% p.a. variable
- comparison rate
- 5.95% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $10,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Investor
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- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Unloan Unloan Variable
* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.
** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.
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