Kiwis in search of better wages in Australia could be in for a nasty shock, with house prices and rents across the ditch surging.
Figures from Australian real estate site Domain found that asking rents in the country’s capital cities reached record highs in the third quarter of the year, driven by low vacancy rates.
Domain analysts reported that Australia needs an additional 40,000 to 70,000 rentals to shift to bring the market back to normal vacancy levels.
In Sydney, the median weekly rent for a unit jumped more than 20% year-on-year to A$680 (NZ$724), while in Brisbane, the city long favoured by expat Kiwis as a more affordable option, the median weekly rent for a unit was up 19% to A$550.
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By contrast, the median weekly rent for a house in Auckland is around NZ$670.
Property experts predict Australian rents will keep rising throughout 2024, citing strong migration numbers.
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The outlook for house prices in Australia isn’t much better for Kiwis, although for those already on the property ladder there, the revival in property values will be a boon.
CoreLogic Australia’s research director Tim Lawless said the strong market performance in Australia’s major centre reflected low listing volumes. Brisbane, Sydney and Melbourne, which each recorded gains in the second and third quarters of this year, had advertised supply levels around 40% below their previous five-year average. Only Hobart bucked the trend with higher supply. Its house prices were still going down as a result.
Perth and Adelaide reached new record highs in the third quarter of 2023, and Brisbane was only 0.6% below its peak.
Australia’s heated property market, however, is unlikely to stop Kiwis from making the move. Figures from Stats NZ earlier this year showed the number of New Zealanders migrating to Australia nearly tripled in one year, although according to Stats NZ, Kiwis are also returning home.
A four-bedroom home on Paul Crescent, in Epping, Victoria, was snapped up by Kiwis for A$855,000 earlier this year. Photo / Supplied
Ray White chief economist Nerida Conisbee: "Unless you’re coming from Auckland, you are likely to find the cost of housing quite shocking in Sydney.” Photo / Supplied
One of the biggest motivating factors is money. The average salary in New Zealand may have hit a record high of NZ$70,000 this year but in Australia the average wage was NZ$30,000 higher.
Australian real estate agents do note that while house prices are higher in many of the country’s major metros, they do vary, and buyers are often getting more for their money compared to what’s on offer in New Zealand.
Haesley Cush, principal of Ray White New Farm in Brisbane, said there are three very good reasons a lot of Kiwis choose his city when making the jump: work is plentiful, whether it’s skilled or unskilled; Queensland has 80% sunny days; and property prices are reasonable.
“There is so much work over here. We’ve got the Olympics coming. We've got a massive casino that’s being built. You see crane after crane in Brisbane because it’s a city that’s alive with infrastructure projects,” he told OneRoof.
He likened his patch in Brisbane’s New Farm and neighbouring Newstead to Ponsonby in Auckland, and said he recently sold a two-bedroom apartment in Newstead to a Kiwi for A$800,000. “You can pay anything from A$600,000 to A$6 million in Newstead,” he said, noting that buyers can get a three-bedroom house 10km from the CBD for as little as A$800,000.
Melbourne is another popular city for Kiwis, and although prices there are higher than in Brisbane, the median house value, A$933,000 in Q3, is still lower than Auckland’s. Melbourne agent Robert Ozzimo, from Harcourts, said he recently had two Kiwi buyers competing for a four-bedroom home on Paul Crescent, in Epping. The property sold to one of them for A$855,000. “The Kiwi who missed out on the property liked it because it reminded them of the home they had in New Zealand,” said Ozzimo.
Houses in Brisbane. The city is favoured by Kiwis for the work, sunshine and relatively affordable housing. Photo / Getty Images
Adelaide homes cost half what they do in Sydney. Photo / Getty Images
He said many first-time buyers in the city were buying on the fringes for lower prices. “If you look a little bit further to the north, there’s a lot of new subdivisions,” he said.
Sydney property prices are a different beast altogether, and New Zealanders planning to move to the city will need a well-paid job, said Nerida Conisbee, chief economist at Ray White. “Sydney is super expensive. Unless you’re coming from Auckland, you are likely to find the cost of housing quite shocking in Sydney.”
For migrants earning half a million dollars, Sydney’s house prices don’t matter so much, said Conisbee. “But if you’re earning $80,000, they do.”
Not all of Sydney is expensive, Conisbee pointed out. “[Just] the places that are close to water. If you go to outer suburban areas, you can get cheaper housing. In country New South Wales, for example, there are far more affordable options.”
She also pointed out that like in New Zealand, prices in Australia’s regional cities such as Newcastle and Geelong, were significantly more reasonable than prices in the capitals.
“But then if you’re working in a capital city, you can’t really live in most regional areas.”
Adelaide, the capital of South Australia, is a different story, however. “In Adelaide, houses are about half the cost of what you find in Sydney. So that is super affordable.” Those prices make it possible to live near the water south of the centre for prices that would make an Aucklander jealous.
New Zealand buyers in Australia are sometimes surprised to find that residential property sales are taxed. There are exemptions to stamp duty for people buying lower-priced homes, but it’s different for each state and territory.
Another common shock is that Kiwis can’t use their KiwiSaver to buy in Australia. However, Australia has a number of schemes for first-home buyers that New Zealanders may be able to access. That includes the Shared Equity Home Buyer Helper scheme in NZSW, and the Victorian Homebuyer Fund.
