Property Market is going to be ok :)

Skilled migrants add to Australia's wealth, report finds

There still seems to be enough support in the govt. sector for immigration.

 

Growth for growths sake? Unless the GDP per capita is increasing, it's not real growth.

 

This report is total BS, does not consider cost to States to pay for infrastructure/services/Energy (extremely expensive in already built-out cities (land repurchase/tunnel)) and the productivity commission already stated most of the benefits go to migrants themselves.

 

Do you have a link to the report?

 

https://cdn.tspace.gov.au/uploads/sites/107/2018/04/Shaping-a-Nation.pdf

by the way I m certainly not a fan of MB but they did a good debunk of this crap:
https://www.macrobusiness.com.au/20...s-australian-treasury-likes-mass-immigration/

 

this report reads like 'no but I am still correct...'

 

And the treasury assumes for their projections (which show a very weak increase of gdp per capita) that all infrastructure costs/needs will be met to keep productivity despite pop growth, which is a joke (as most migrants move to already built-up cities, 90% to Mel/Syd)

 

93.87% of all statistics are made up on the spot.

State migration
3412.0 - Migration, Australia, 2015-16

NSW - 32.83%
VIC - 44.85%
QLD - 17.35%

NSW/VIC combined - 77.68%

So close but still over 10% off however you talked about cities.

Cant find anything about NOM for cities but I guess there could be correlation between internal migration.

City migration
3412.0 - Migration, Australia, 2015-16

Brisbane was number one and Sydney was clear last of the capitals - so I guess although they might arrive in NSW people quickly move. Also Gold Coast was number one of the regionals.

 

there is nothing wrong with a large city with infrastructure problems. Both NY and London have problems that is why Melbourne is the most liveable city which is NOT good. Australia seems to be obsessed with liveable cities and standard of living which is why certain careers are impossible to achieve in Australia. There should be some cities where business is the priority so you can pick and chose you want.

 

You re right I should have said n 2016, 86% of migrants between 2011-2016 have settled in Australian cities.And Sydney had the highest overseas-born population of all capital cities (1,773,496), followed by Melbourne (1,520,253) and Perth (702,545). The 2016 Census also reveals that those born overseas were more likely to live in a capital city (83%), a much higher percentage than people born in Australia (2024.0 - Census of Population and Housing: Australia Revealed, 2016).

That does not change my point much, they mostly end up at Sydney & Melbourne and infrastructure have to be build within already built-out cities, suboptimal IMO and quite a change.

concerning city migration, for what I see from SEQ, most new inhabitants are Aussies displaced from Sydney/Melbourne (where they grew up) not new migrants.

 

Great, so now we need to figure out what percentage of growth per capita has increased due to immigration.

 

If there was 1 property market as the heading implies, then I'd be extremely worried. There are thousands of markets around Australia. If I can't find just 1 market out of thousands showing opportunity then it's time for me to pack it in.

 

London and NY are the financial capitals of their countries. Which is what I thought Sydney was.

 

Unfortunately, high immigration won't make much difference. Property prices have risen because the proportion of investors in the market has gone from about 5-25% (varying over time) to about 50% within around 5 years.

The rate of immigration (despite all the media talk and general perception is has never been higher) is also relatively low compared to a decade ago, and has been double what it is now in the recent past. It isn't "keeping the economy afloat", it's just a natural consequence of economic movements. People come here in booms, leave in busts. In Ireland we had massive immigration (a near record high) right up until the boom, then plunged into almost negative population growth rates, but it was a small factor in the bust. Investors began leaving the market long before that dive.

To put it in perspective, Irish population growth was about 3% in 2007 (when the bust had already started). By 2008 it was still higher than Australia's growth is now, and it was still over 1% in 2009 (so only a smidge below Australia's current population growth rate) when the majority of the price drop had already happened.

High immigration didn't "save" Ireland's propety market and immigration movements really didn't have a whole lot to do with the end result. Yes population was a factor, but the main driving force is always demand and supply, driven by sentiment. If investors are half the current market base for property, and this demand disappears (because people either won't buy or can't get finance) then immigration is not going to prevent a downturn.

 

Didn’t Ireland have a weak struggling economy up until the housing boom? If so then the boom didn’t have a solid foundation to begin with.

 

God no, we had the Celtic Tiger. The great economic miracle. An "envy of the world" economy. (Ireland had an absolutely massive boom during the 90s, right up until the crash.) (The housing boom happened towards the end of the boom, and continued even after it had started winding down.

It was eerily similar to the way the mining boom here in Oz caused a period of sharp growth, and then a mania/bubble on the back of a natural housing boom. In the early Irish boom, there was a big undersupply of housing, as foreign investors and migrants an new employees couldn't find enough places. Investors did very well. By the later part of the boom people got silly and the inexperienced had started investing in housing too, for no other reason than they thought they'd get rich, with very little real idea of what they were doing).

 

Yeah, Australia's housing boom has come off the back of a mining boom, similar to the US housing boom coming off the back of a tech boom. I think this is why people say the central banks only make busts worse by lowering interest rates and inflating the bubble much, much larger instead of letting them pop 7 years ago.

But looking into the Celtic Tiger I read Ireland got criticized for allowing such a massive bubble to occur in an economy that had a history of being very unstable. What gives people confidence about Australia is it's record long stability.

 

Ireland's economy was never that unstable. There were some structural problems e.g. massive marginal tax rates, trade barriers and during the 70s and 80s there were a lot of reforms (again another theme in many economies) In growth terms the economic rough patch in the 80s wasn't extreme by any means, and not really more significant than anywhere else in the world experiencing recessions in the 80s (a lot of countries went through a patch of recession or high unemployment). There was also a huge population spike around the early 1970s which contributed to an economic adjustment.

In terms of criticism everyone likes to unpack the coulda woulda shouldas after a bubble. It was definitely stupid and could have been predicted or prevented but sometimes theres very little real control over these things. Things could have been done better and everyone was happy to point fingers at migrants, banks, the EU, the Fianna Fail party etc which was in turn keen to blame others.

 

They are financial capitals of the world not just their countries. That is what we want Sydney to become. If someone does not like the crowd they can move to Adelaide.