Australian home prices just hit a high in what was already one of the world’s most expensive real-estate markets. Now, Australian officials say they have a plan that will help to make housing more affordable: curtailing migration.
A new policy, unveiled this week, will result in a 14% reduction in migrants over the next four years than would otherwise be expected, according to government forecasts. The country of 26 million absorbed a record of some 510,000 net arrivals in its most recent fiscal year, more than 20% above what officials had projected seven months ago.
Australia has been one of the countries most affected by record global migration following the relaxation of Covid-era travel rules. While that has helped sustain economic growth in the face of elevated inflation, rising interest rates and supply-chain problems, many newcomers are landing in cities where housing is in short supply, helping push up rents and propping up home prices despite sharp increases in borrowing costs.
Australia isn’t alone in seeing housing costs escalate against a backdrop of higher migration. In the U.K.—which just announced its own plan to substantially limit newcomers—annual inflation in rents in October hit its highest level since records began in 2016, and has accelerated for 26 consecutive months. In the U.S., the median existing-home sales price is up 8.5% since bottoming at $361,200 in January, according to National Association of Realtors data.
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