Australia’s recent strong population growth — driven mainly by net overseas migration — has been a significant motor for housing demand across capital cities, including Perth. Over the past few years, net overseas migration rose considerably above historical averages, adding significant demand to rental and owner-occupied markets.  

The ABS recorded net overseas migration in the hundreds of thousands in recent financial years, with 446,000 in 2023–24 after a high earlier. But house prices are not a single-factor phenomenon.  

Immigration flows are influenced by several factors, including supply conditions (new home building, listings, land availability), interest rates, household incomes, local economic performance (mining/jobs in WA), internal migration, and investor sentiment.  

In Perth, the combination of strong population growth for WA, restrictive listings, and stronger demand has supported considerable price appreciation in 2024–2025 — REIWA and local media confirmed rapid increases and solid expectations for Perth in 2025.

Would prices decrease if immigration stopped?  

Not always, and not in a direct manner. A sudden and sustained stop in immigration would lower demand relative to recent trends and could slow or reverse growth over time, but the magnitude and timing of any price effect would depend on :

• The size and speed of the immigration shock
• How do internal migration and household formation respond
• Monetary policy moves
• Housing supply dynamics
• The state of the local economy (jobs, wages, commodity cycles)

Carefully controlled decreases in migration would likely moderate price increases rather than triggering an immediate collapse; a rapid cessation could create localised pressures (especially in segments that rely heavily on recent migrants, e.g., rentals, inner-city apartments, and entry-level properties).  

Academic and Australian evidence suggest immigration raises property prices, but susceptibility varies by region and dwelling type. For Perth and for Bargoti Real Estate, the practical implications are:

• Monitor migration announcements and ABS data.
• Watch early-warning indicators (listings, rental vacancies, days on market)
• Adapt stock mix (weight towards assets that are less migration-sensitive
• Family homes in growth corridors, higher-quality long-term rentals) Tighten underwriting and cashflow assumptions for investors.  

This Blog discusses the mechanisms, evaluates international and Australian evidence, applies the rationale to Perth’s market, presents four scenarios (from a minor slowdown to a deep shock), and lays out playbooks for sellers, buyers, investors, and property managers.

Why immigration matters for housing — the theory

1. At its simplest, housing prices reflect the balance between demand and supply. Immigration increases population and hence demand for dwellings — both rental and owner-occupied — immediately through arrivals and over time through household formation (students becoming workers, temporary migrants switching to permanent residency, family reunification).

2. New arrivals need roofs; they rent first and later buy; they raise household formation rates and increase labour supply, which can boost incomes and credit capacity. Key theoretical channels:

• More people = More households =  More demand for homes and rentals.
• Newcomers typically rent first; high inflows reduce vacancy rates and raise rents, which increases investor yield expectations and supports prices.
• Immigrants who find employment raise incomes, supporting borrowing and bidding for homes.
• Sustained migration can incentivise more building, but building takes time; in the short-to-medium term, supply lags can amplify price rises.
• The mix of migrants (students, skilled workers, temporary vs permanent) matters — students often compete in shared housing, while skilled migrants may buy faster.

3. Academic modelling finds that immigration exerts an upward influence on house prices, but the magnitude and timing depend on local conditions. Later sections cite quantified estimates for Australia and international studies.

The current migration and Perth context (latest data)

1. In recent years, the ABS recorded extremely high net overseas migration (e.g., 446,000 in 2023–2024, after earlier peaks). Temporary students remain a substantial component of arrivals.  

2. These higher flows have fuelled population increases and housing demand across capital cities. One of the fastest-growing states, WA has seen significant population expansion in recent reporting periods.

3. Demand is supported by jobs in the oil and resource industries and an expanding development pipeline. Local analysis and Bargoti’s market notes highlight WA’s robust growth and the role of net migration contributing to Greater Perth’s growth.

4. Perth witnessed record-high median prices in 2024–2025, and strong price performance persisted into 2025 due to supply limitations and strong demand, according to REIWA and local market data.

5. REIWA specifically anticipated a double-digit (yearly) increase in various publications for sections of 2025, citing listing shortages and low vacancy rates.

How a zero-immigration scenario would work in practice — transmission channels

1. Imagine immigration decreases to zero overnight and stays there for an extended period. Vacancies would rise (or vacancy increases would be smaller) within months, decreasing rent growth.  

2. Markets that depend heavily on migrant tenants—such as shared housing near universities or inner-city apartments—are immediately affected. Fewer buyers entering the market (less competition) results in a slower price rise.  

3. After a few quarters, price pressure can be significant in suburbs where net migration accounted for a large share of purchasing demand. If rents drop and vacancy rates rise, investor yields shrink, or investors become hesitant, this might depress prices in investor-heavy market segments.

4. As demand declines, developers and builders respond by reducing the number of starts and decreasing land sales. Due to the forward-looking nature of construction decisions, there is a risk of supply overshoots and adjustments if migration increases.

5. A decline in population-driven demand could influence inflation and growth, thereby affecting interest rates. If the RBA senses decreased demand and inflation risk, this might lead to lower rates, which would support prices – perhaps offsetting some negative impact of zero immigration.

6. Rental markets move faster (months), buy markets adjust over quarters to years, and supply (new constructions) adjusts over years. Therefore, restricted rent growth would be the first sign of an immigration freeze, followed by multi-quarter lags in sales.

Perth-specific sensitivities

Perth has features that make it both vulnerable and resilient:

1. Vulnerabilities:

1.1. If the number of international students decreases, rents in areas with large student populations and short-term rentals may soften immediately. The ABS highlighted that students represent a substantial component of migrant arrivals.

1.2. A few listings helped Perth’s recent price increase. In the short run, the negative impact on pricing would be mitigated if immigration were to cease, as the market might experience a slight decrease in demand but a temporary supply shortage.

1.3. Listings are below long-run averages, according to REIWA statistics, which support prices. Investors who have made significant purchases of suburbs with an eye towards migrant rental profits may be particularly vulnerable.

2. Strengths/resilience factors

2.1. Perth is tied to the mining and resources industry, which drives wages and local demand; if commodity prices and projects remain active, employment demand supports housing. Bargoti market remarks and WA data point to relatively strong population growth and dwelling completions in recent months.  

2.2. Australia-wide internal migration patterns — such as people relocating to WA for jobs — could offset lost overseas migration. Ongoing house completions and government building targets mitigate the dynamics, especially in the medium term.

Four scenarios: Range of outcomes for Perth property prices

To illustrate the spectrum of potential market behaviour if immigration were to cease altogether, we present four stylised scenarios below. For each scenario, I outline timing, predicted price direction, rental implications, and likely policy responses.

Scenario A — Mild slowdown (managed reduction; not immediate zero)

• Migration reduced drastically (e.g., back to the historical average over 12 months), not nil; the government handles housing, work visas, and infrastructure.
• Rent increase slows within months; sales growth moderates within 6–12 months; price growth decreases from double digits to low single digits; no crash. Due to internal migration and a robust local economy, growth slows but stays healthy. REIWA-style forecasts would be lowered but not negative.

Scenario B — Sharp stop, temporary (zero for 1–2 years then resumes)

• A sudden policy shock/ worldwide event ends arrivals for 1–2 years; the economy otherwise stays stable.
• Sales volumes decline, rental markets slump, vacancy increases, investor yields tighten, and prices in areas that depend on migrant demand (inner-city, tiny flats) plateau or slightly decline.  
• Single-family detached residences along expansion corridors are less affected. Recovery happens when migration resumes.Short-term price slump in units and inner suburbs; regional and family homes more resilient.

Scenario C: Extended zero (multi-year)

• Immigration halted for numerous years, paired with slower internal migration and weaker responses in the construction pipeline. Over several years, oversupply has created danger in some categories (purpose-built student housing, roommate-type rentals).  
• Affected segments see price declines, and new construction projects either stall or are shelved. Monetary policy reaction (lower rates) cushions sales, but the rental market could stay sluggish. Downward pressure on rents and prices in renter-dense locales; broader market adjustment if the labour market deteriorates.

Scenario D: Economic decline + shock (zero migration + recession)

• As commodity prices decline and employment in WA declines, immigration ceases. A combined demand shock produces material drops in rents and house prices; mortgage stress rises; distressed selling increases; and confidence falls.
• Most considerable downside – could see multi-quarter price decreases; concentrated in economically exposed suburbs and among highly leveraged investors.

The likely route for Perth is not a uniform collapse; results differ by scenario and asset class. Short-term rental and inner-city unit markets are the most susceptible; family homes and places with robust jobs pipelines are more resilient. Although it is rarely the only factor, historical and scholarly research indicate that immigration affects price increases.

Winners and losers — asset types and suburbs likely to be affected

1. More vulnerable

• Inner-city units and small apartments: intense student/temporary resident concentration; short leasing cycles; investor-heavy.
• Shared apartments & low-quality rentals near universities: depend on international student intakes.
• New-build’ build-to-rent’ and purpose-built student accommodation could suffer occupancy challenges if arrivals suddenly reduce.

2. Greater resilience

• Detached family homes in growth corridors: acquired by migrating families, often less reliant on temporary migrants.
• Owner-occupied premium homes: buyers are less affected by short-term fluctuations in rental demand.
• Suburbs with substantial local employment (resource & construction precincts): if jobs persist, demand holds.

3. Perth’s per-suburb nuance (examples)

• Suburbs around Curtin, UWA, ECU and TAFE catchments with many international students could face reduced rental demand.
• Growth corridors, new master-planned communities in the northern and southern suburbs, are likely more resilient and typically attract families and long-term buyers.
• Local REIWA dashboards and Bargoti local research can identify exact suburbs by age profile and rental stock.

Policy and development responses: what governments and industry can/should do

1. If migration returns to zero or is substantially decreased, policy and industry levers can mitigate the impact and rebalance markets.

2. Simplify permissions and expedite brownfield and infill projects to improve supply responsiveness. In 2024, WA government completions increased; sustaining pipeline acceleration contributes to long-term price stability.

3. If vacancies rise and rents fall substantially, support measures (short-term rental aid, tenancy reforms) might be implemented to mitigate suffering.

4. Policies that promote internal mobility, apprenticeships, and labour force participation can lessen economic shocks if migration declines. Universities and governments may rebalance foreign student recruitment to sustainable levels to avoid boom-bust cycles.

Practical guidance — Bargoti Real Estate playbook

Below are actionable recommendations for Bargoti’s clients and operations: sellers, buyers, investors, and property managers.

1. For Sellers (developers and homeowners)

• If migration indications diminish, avoid headline-chasing pricing; buyers acquire more negotiating power.
• For family houses, target owner-occupiers by emphasising lifestyle and school catchments; for apartments, target both local buyers and investors by enhancing rental appeal (longer-term tenants).
• To prevent concentrated selling later, move postings forward if indicators point to a slowdown.

2. For buyers (owner-occupiers)

• If you have a long time horizon and your cash flow permits, a decline in inner-city unit prices may present an opportunity.
• Employment accessibility, school zones, transport; these matter regardless of migrant movements.
• Assume some pricing and rent volatility; run a stress test to identify short-term rent drops or higher interest rates.

3. For Investors

• Examine the sources of tenant demand (local workers versus students), the lease term, and the history of vacancies.
• To lessen the vulnerability to migration, balance apartments with homes in growth corridors.
• If migration declines, be cautious when predicting capital gains and rent growth.

4. Bargoti’s operating guidance for property managers

• If demand declines, a longer average tenancy lowers the chance of turnover.
• In situations where it reduces risk, provide longer leases with CPI-linked increases.
• Every week, keep an eye on local demand and vacancy microindicators.

Australia post-pandemic recovery & migration surge (2022–2024)

1. After COVID-related restrictions eased, migration soared. The accompanying population growth boosted rental and sales demand across capitals. Perth benefited from increased inflows and internal migration; listings remained restricted, and prices rose.  

2. REIWA reported that 2024 saw historic gains in Perth’s median price. Price growth may accelerate with rapid migration surges, particularly when supply is limited.

3. Cities that experienced abrupt reversals in migration (such as several European markets driven by tourism during travel restrictions) saw significant drops in rental and occupancy rates in tourist-oriented segments. At the same time, the effects on family housing were less pronounced. Exposure is essential (families vs. tourists/students)

Practical modelling (simple sensitivity example)

1. assuming Perth population growth x% p.a., median house price growth y% p.a., vacancy rate v%. Over 12 months, net overseas migration drops to zero, resulting in an absolute decline in households (ABS figures provide arrivals; convert to households by household size).

2. For example, the estimated 400k net migrants nationally might translate into ~150k households; Perth’s portion relies on regional attraction (use Bargoti statistics to estimate share).

3. Next, model pricing impacts by running scenarios that modify demand and using short-term supply elasticity estimations. Research indicates that short-term price elasticity to migration is positive but less than 1:1. For example, depending on supply rigidity, a 1% decrease in population growth may result in a lesser percentage reduction in price increase.

Conclusion — will property prices follow immigration down to zero?

Although immigration is essential, real estate values don’t always follow suit. A zero-immigration policy would almost certainly affect Perth, especially rentals and areas that rely on newcomers (students, short-term renters, investor-targeted inner-city units).  

However, a variety of other factors, like local jobs and incomes, internal migration, listings/supply, and monetary policy, would determine the general direction and magnitude of the price shift. Unless the immigration shock were followed by a significant economic slowdown, in many plausible scenarios, a drop to zero would slow or reverse price growth in sensitive segments rather than trigger a global meltdown.

For Bargoti Real Estate, the realistic response is to:

• Monitor the indicators (local leads, ABS, and REIWA).
• If signals indicate a persistent decline, rebalance stock and marketing away from immigration-sensitive areas.
• Provide clients with prudent cashflow stress testing and a diversified asset approach.
• Take advantage of the disruption: sellers with well-positioned family homes will remain appealing, and selective buyers will find deals in sensitive categories.

Perth’s property market will continue to adapt, driven by strong fundamentals and lifestyle appeal. At Bargoti Real Estate, we help you stay ahead of every shift. If you’re planning your next move or seeking expert guidance, connect with us today and make confident, future-ready property decisions.

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