If you are in Victoria I hope you have managed the recent lockdown and are looking forward to a long week-end with less restrictions.
There was more good news for the apartment market outlook this week in JLL’s Apartment Market Overview 1Q21 Report. Senior Director of Research Australia – Leigh Warner and senior analyst Hollee Hart produced a very comprehensive report on the apartment markets around the country which you can download here.
Their findings of decreased supply pipeline and an apartment shortage outlook, confirms similar research outlined here last week, but they also dig deeper into how the outlook will be impacted by future immigration and the jobs market.
The JLL report states that the Covid driven closer of Australia’s international boarders, had its biggest impact on the Eastern States. In the last five years NSW and Vic have accounted for 67% of Australia’s population growth and if you add in Qld, that number jumps to 87%. This population growth has been a major driver for not only economic growth but also the apartment market for both rental and home owner accommodation.
You may recall forecasts of double digit unemployment in Australia at the start of Covid in early 2020 and even in 3Q20, unemployment was forecast to be 8.5% post pandemic. We now sit at 5.5% and falling, with many sectors bemoaning a skilled labour shortage. If Australia ’s job market and general economy had emerged in a weak state from Covid, the government may have faced strong opposition to re-opening the boarders to immigration and bringing in competition for precious few jobs.
On a global scale Australia has survived Covid very well with both economic and health outcomes being very positive. This ensures there will be strong demand global to migrate to Australia and it will maintain its “safe haven” status as well as all the other attractions to life in Australia.
Leigh concludes that the rebound in migration and student intake is likely to rebound strongly with little if any political or economic barriers. This will boost our economy which is already rebounding strongly as well as drive a strong recovery in apartments rental demand (especially in Melb and Syd) where new supply is very low. Tourism, business and event travel will return at the same time and short stay accommodation will return further tightening supply.