The shocking impact of migration on Adelaide house prices has been revealed

Controlling immigration could have an immediate impact on runaway house prices, one expert said, and it could do so more quickly than simply solving housing supply problems.

FoundIt’s head of research Kent Lardner said migration has fueled house price growth across South Africa, and that much of the political discourse on the housing market in recent years has focused on housing supply alone, without addressing needs such as migration.

“When we defined the market, the whole narrative was about supply,” he said.

“Since Covid, there has been one issue that has been discussed about housing prices, which is supply, in fact, anyone who has done the economics of high schools, knows its availability and its demand.

“One thing we can’t control is immigration.”

Mr Lardner said a return to pre-Covid population growth would reduce pressures by 2 to 3 per cent a year.

“That means that the market that would grow this year by 5 percent, will grow by only 2 percent,” he said.

“It has a big impact. It might not sound like a small thing, but that change in growth year over year is huge.”

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Mr Lardner said that while immigration was out of control, immigration was not out of control.

“Migration must be linked and paired with housing provision,” he said.

“If we reach the top of the goods, we can open the country further.

“Policy needs to adapt.

“We can bring people in, but in a volume that matches our houses.”

Mr Lardner said that where more homes are being added each year than are being built, demand pressure is not spread evenly, it is concentrated in affordable price bands.

He noted that Adelaide had become the preferred choice for many arrivals, meaning migration had an impact on prices.

FoundIt’s head of research Kent Lardner

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“Migration has had a significant impact on Adelaide’s price increase,” he said.

In Adelaide, he chose five places where this was most evident.

The first was Elizabeth, where prices rose 14 percent in 12 months to $610, more than half of households rent and most spend 50 percent of their income on it.

Christie Downs saw a 13 percent increase to $720,000; Hackham West – Huntfield Heights prices rose 20 percent to $735,050; Salisbury home prices rose 15 percent to $740,000, while Smithfield – Elizabeth North home prices rose 12 percent to $580,000.

“Subterranean areas where housing construction is rare will not have a major impact on the migration of people to other areas, but if we move to areas with green areas, prices are more vulnerable,” he said.

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Ray White Port Noarlunga agent Jackie Scott, who is currently selling the house at 8 Hartland Ave, Christie Downs, said prices have increased due to both these demands, and the fact that old affordable houses have been replaced with new and more expensive ones.

“We’re getting a lot of offers from all over the place,” he said.

“Young people will study for between 6 years, which is still a lot of money for young people to be able to pay, so most of them, especially with the interest rate where they are, feel that they can only reach $500,000, so some of them are no longer available.”

Real estate agent Jackie Scott outside the home she is selling at Christie Downs. Photo: Eleni Tzanos

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Ms Scott said immigration has a positive impact on society, but increased population means more competition for goods.

“That being said, the Foreign Investment Review Board changes have made it harder for non-Australian citizens to buy, they can’t just walk in and buy, so there are still opportunities for everyday Australians to buy,” he said.

– with Aidan Devine