3 . International borders reopen
While the opening borders are great news for anyone wanting to travel overseas again , it ’ s also particularly positive to our economy .
Australia ’ s strict quarantine restrictions kept us safe during the worst of the pandemic but it wasn ’ t great for our economy . Our education sector has suffered from a lack of international students . In apartment markets close to universities , we saw high vacancy rates and worst of all , we ’ re continuing to see employee shortages across a wide range of industries .
Open borders will initially mean rental increases . People migrating to Australia , or coming here to study , will typically rent - at least initially . While this is good news for tenant starved markets like Melbourne CBD and Parramatta , it ’ s less positive for places like south east Queensland which was already seeing rental shortages prior to the floods .
Following rental rises , it ’ s likely that foreign investors will also return . This will partly be driven by better rental increases but also because of the ability to travel to Australia . Rental rises and foreign buyers returning will be two things that kick-start the next construction cycle , particularly for apartments .
4 . Upcoming federal election
We still don ’ t have an election date and we still don ’ t know exactly what policies will be proposed by either party with regards to housing . It ’ s likely that given how much house prices and rents have increased over the past 12 months , as well as the withdrawal of first home buyers , that affordability will be the hot topic .
Trying to solve affordability is complicated . Increasing supply of housing is the gold standard when it comes to creating enough homes for the people that want to live in them however building homes where people want them is not easy . Construction costs , land availability and existing resident pushback are some of the challenges faced when trying to build more homes in desirable suburbs .
At this stage , it seems unlikely that investors will be a target in the same way they were in the last federal election . Right now , we have a rental crisis in many parts of Australia , something that will only get worse once population growth starts up again . Restricting rental housing at this time doesn ’ t make sense - although it would help many first buyers get into the market , it would lead to even greater rises in rents which impacts young people and those on lower incomes more heavily .
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