Wealthy migrants force up property prices

Monday 18 January 2010

Article by Mozo

Aussies are struggling to afford property because highly paid migrants are forcing up prices, a new report has found.

Research by the Sunday Telegraph found that Australian house prices are currently among some of the highest in the world when compared to average incomes.

According to the newspaper, almost 115,000 permanent skilled visas were issued last year, compared with just over 40,000 in 1998-99 – an increase of 187 per cent.

During the same time, the median house price rose 168 per cent, from $156,600 to $420,600.

Such a finding may encourage bank customers to compare home loans as financing conditions become increasingly difficult.

The newspaper found that while the number of migrants is relatively low compared to total property transactions, property price rises are caused by what the highest bidder is willing to pay not what the average buyer can afford, with most skilled migrants earning above-average salaries.

According to the Sydney Morning Herald, the number of new home loans issued in November dropped by 5.6 per cent. In addition to rising prices, such a drop was caused by a reduction in the first home owners’ grant in October, the newspaper said.

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