The Impact of Immigration on Housing Prices in Australia

In recent years, Australia has experienced high rates of immigration. We investigate the effect that this has had on housing prices at the postcode level. The endogeneity of immigrant inflows is accounted for using the Bartik shift‐share approach. Using data from the censuses in 2006, 2011, and 2016, we find that an immigrant inflow of 1% of a postcode's population raises housing prices by around 0.9% per year. As a result, Australian housing prices would have been around 1.1% lower per annum had there been no immigration. The size of this effect is broadly consistent with that found for other countries. The effects of immigration on housing prices were larger in the more recent part of the period examined and strongest in the states of New South Wales and Victoria, and the cities of Melbourne and Adelaide. Chinese and Indian immigrant groups are shown to have a strong positive influence on prices.