In recent weeks, media reports have shed light on federal government plans for record-breaking net overseas migration—combining 650,000 skilled workers, family reunions, humanitarian arrivals and international students over two years. As Australia’s largest and most iconic city, Sydney is the target destination for a large proportion of international arrivals.
How much of the 650,000 net arrivals will call Sydney home?
The Daily Mail cites the ABS’s recent data indicating that 29.3 percent of permanent migrants who arrived in Australia between 2000 and 2021 live in Greater Sydney. Using this number, a simple calculation suggests that Sydney can expect 190,450 added to the population through immigration by mid-2024. In truth, it’ll likely be more. Then we also need to account for natural increase (births minus deaths) and net internal migration (arrivals from elsewhere in Australia minus departures to elsewhere in Australia). At the end of this equation, we could reasonably expect approximately 200,000 more people in Sydney in mid-2024 than there were in mid-2022.
What does this mean for demand for housing?
The 2021 census tells us that Greater Sydney houses an average of 2.7 people per household. To house an additional 100,000 people each year, Sydney needs to build at least 37,038 homes annually. This isn’t even being achieved by the whole state of New South Wales, let alone Sydney. It’s therefore unsurprising that Sydney is experiencing a severe rental shortage, with SQM Research reporting that just 1.3 percent of rental dwellings were available for rent in February this year. A surge in population without adequate new housing construction to house them inevitably places upward pressure on both house prices and rent.
The role of the north-west
Only a few pockets of Greater Sydney are equipped to meet the demands of Sydney’s swelling population. In recent years, this task has been largely met by the north-west, with the Riverstone-Marsden Park and Rouse Hill-Beaumont Hills areas regularly featuring as among New South Wales’ fastest growing. In order to capitalise on this upswing in demand, homebuyers and property investors alike should consider making their purchases sooner rather than later!