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AUSTRALIAN families are being priced out of the property market by record numbers of highly paid skilled workers arriving from overseas.
Research by The Sunday Telegraph has revealed for the first time how skilled immigrants - predominantly from Britain, India and China - are forcing house prices to some of the highest levels in the world when compared with average incomes.
Almost 115,000 permanent skilled visas were issued last year, compared with just over 40,000 in 1998-99 - an increase of 187 per cent.
During the same period, the median house price rose 168 per cent, from $156,600 to $420,600.
Although the number of migrants is relatively low compared with total property transactions, which have averaged 500,000 a year over the past 10 years, experts say property-price inflation is driven not by what the average buyer can afford to pay, but by the highest bidder.
And because skilled migrants command above-average salaries, they pay above-average prices. As a result, a relatively small number of highly paid buyers can have a disproportionate effect on house prices.
"There's no question the number of skilled migrants is a key factor in driving up prices," John Edwards, of property monitor Residex, said.
"You need only two highly paid buyers at an auction to take the price of a property well above what any other party could afford to pay."
Proof of this theory came when Mr Edwards plotted a chart of the increase in skilled migration alongside national house-price growth.
"It correlates at a rate of 98 per cent, which is almost unheard of," he said.
"It even has an 18-month time lag, which is obviously the period between immigrants arriving in Australia, getting themselves settled and when they first purchase a property."
Coinciding with the surge in skilled immigration, the median Australian property now costs 5.5 times the average household income, and about eight times income in Sydney.
That compares with a ratio of 2.5 times household income in the US and five times income in Britain.
Property prices in the US and Britain have collapsed, but neither country approached Australia's peak of six times income even before their markets crashed. Australia's skilled migration program is likely to keep prices rising for years to come.
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Jenny
Research by The Sunday Telegraph has revealed for the first time how skilled immigrants - predominantly from Britain, India and China - are forcing house prices to some of the highest levels in the world when compared with average incomes.
Almost 115,000 permanent skilled visas were issued last year, compared with just over 40,000 in 1998-99 - an increase of 187 per cent.
During the same period, the median house price rose 168 per cent, from $156,600 to $420,600.
Although the number of migrants is relatively low compared with total property transactions, which have averaged 500,000 a year over the past 10 years, experts say property-price inflation is driven not by what the average buyer can afford to pay, but by the highest bidder.
And because skilled migrants command above-average salaries, they pay above-average prices. As a result, a relatively small number of highly paid buyers can have a disproportionate effect on house prices.
"There's no question the number of skilled migrants is a key factor in driving up prices," John Edwards, of property monitor Residex, said.
"You need only two highly paid buyers at an auction to take the price of a property well above what any other party could afford to pay."
Proof of this theory came when Mr Edwards plotted a chart of the increase in skilled migration alongside national house-price growth.
"It correlates at a rate of 98 per cent, which is almost unheard of," he said.
"It even has an 18-month time lag, which is obviously the period between immigrants arriving in Australia, getting themselves settled and when they first purchase a property."
Coinciding with the surge in skilled immigration, the median Australian property now costs 5.5 times the average household income, and about eight times income in Sydney.
That compares with a ratio of 2.5 times household income in the US and five times income in Britain.
Property prices in the US and Britain have collapsed, but neither country approached Australia's peak of six times income even before their markets crashed. Australia's skilled migration program is likely to keep prices rising for years to come.
Read more ...
Jenny
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