What attracts Indian migrants and investors to Melbourne?
Many different groups are coming to Australia in ever increasing numbers from students looking to receive world-class education, graduates looking for work experience, as well as those joining family, and even multi-millionaires! One of the fastest growing groups are newcomers from India, – what are the drivers for these growing numbers, where are they moving to, and how will property investors benefit?
Migrants throughout history and from every corner of the globe have been willing to make sacrifices in order to provide a better life for themselves and their families in new countries. What they look for are opportunities in a safe, clean, and supportive community.
Destination Australia
Australia being an English-speaking advanced economy with features such as being multi-cultural, secular, democratic, meritocracy with a great climate, clean environment and high food standards has been a major drawcard. In particular for migrants, having strong anti-discrimination laws against race, religion, caste, gender, age and recognition of professional qualifications are of particular note too.
Australia was the only country with 27 years (ie 108 quarters) of not going into recession – mostly due to high number of highly qualified migrants being attracted to Australia. No other developed country comes close, including China. In fact, due to Australia’s desirability amongst immigrants, it has grown to a population size of 27 million, approx. 18 years earlier than expected by government forecasts.
Australia is governed by common law and a strong separation of parliament and the judiciary. It also fared well in terms of both the Corruption Perceptions Index from Transparency International, and the Global Peace Index from Vison of Humanity, thus independently indicating the benefits of life in Australia.
Education
Australia has some of the highest rated universities in the region with natural English-speaking tuition, often safer and cheaper than other regions. Plus, it’s closer in distance to India without much time-difference. Another major benefit for students studying in Australia is their ability to work part time to gain valuable work experience, and for certain qualifications extend their stay to continue working in their chosen profession, which could then lead to permanent residency too. Melbourne, with the highest rated educational institutions and infrastructure for students in Australia, is the preferred destination.
Employment
According to the World Bank, youth unemployment (15-24yrs) in India for the last few years has been between 23-31%, hence increasing competition for good jobs among young graduates. Australia’s youth unemployment has been approx. a third of (and sometimes a quarter) of India’s youth unemployment – spurring many young Indians and their partners to come to Australia for a new life. Indeed, when Australian PM Albanese visited India to meet PM Modi, they announced many joint initiatives to foster relations between the two countries. However, the biggest combined impact was the recognition of Indian tertiary qualifications and the Mobility Arrangement for Talented Early-professionals Scheme (MATES). MATES uniquely allows Indian nationals with qualifications a much easier fast-track to come to Australia with their families, without employer sponsorship and work for 2 years, after which they can extend by applying for temporary or permanent residency.
This has resulted in huge, ever-increasing surge of Indian migrants (plus temporary students and businesspeople) moving to Australia (except during the global COVID pandemic when many students went home, and Australia’s borders were shut). In fact, Indian migrants have now become the 2nd largest community in Australia after those from the UK, with signs that migrant numbers from the most populous nation in the world are set to keep increasing.
Work & Quality of Life
According to Swedish financial firm Sambla’s recent global report, Australia is in the top 10 ‘best countries to work in 2023’, and if you like sunshine & warmth, then it’s the 2nd best according to their analysis (as most of the other countries ahead of it are Nordic countries). Since publication of Sambla’s report, the Australian government has introduced the ‘right to disconnect’ legislation to promote work life balance for employees, and regulators have taken a hard line in keeping employers accountable for underpaying their employees (i.e. ‘wage theft’). This, with 4 weeks annual leave, and ‘work from home’ (fully or a few days a week) being very common and accepted (more so in Melbourne, which endured the longest lockdowns in the world during COVID) has meant that living, working and playing in Melbourne is seen as a highly desirable life choice.
Other groups
Apart from students and young professionals with their families, there are 2 other smaller groups within the Indian migration surge– extended family units (e.g. grandparents) and High Net Worth Individuals (HNWI’s). This is particularly significant for the property market. Indian families are accustomed to multigenerational living, so having a home big enough to house three generations is culturally very important (irrespective of if the grandparents are only visiting or have permanently immigrated). This is another reason why new landed bungalows are so important to the Indian cohort, so they can design a floor plan to their needs and have a plot of land big enough to build on. According to the Henley Private Wealth Migration Report 2023 (which tracks wealth and investment migration trends worldwide), Australia is expected to attract the highest net inflow of HNWI’s in 2023 at 5,200 surpassing Dubai. These HNWI families have the greatest mobility options of any cohort in the world, and are flocking to Australia, and often they are buying properties close to family, friends, and community – which drives up local values.
Property
While many investors and own-stay migrants from Southeast Asia prefer high rise non-landed property, those from India prefer the intrinsic value of land and choose landed bungalows. This is significant as Australia, and especially Melbourne, are at record lows for housing approvals and completions. And with landed properties requiring more ‘land’ which is in even shorter supply than air & concreate (ie non-landed property), and land input costs rising steadily – landed-properties are set to continue their long-term growth trajectory. So having a huge demand from a highly qualified and hence a well-paid cohort means more competition for particular housing types (both buying and renting) in the areas that they favour – hence of particular importance to any current & future property investor.
Why Melbourne?
Melbourne, Australia’s largest city (again), covering over 10,000 km2, which unlike other major Australian capital cities, has plenty of space to grow within its metropolitan area. Melbourne’s population is expected to grow to 6 million by 2032 (and 8m by 2051). Also, the Economist’s Global Liveability Index 2023 has voted Melbourne as the most liveable city in Australia, and the world for seven out of the last ten years (Note: when Melbourne wasn’t first in the world, it was in the top three). This is due to its wide variety of lifestyle amenities including food, fashion, sport, culture, also scoring highly in attributes such as inclusivity, wellbeing, social cohesion, infrastructure, climate plus some of the best education and employment opportunities in Australia.
Numbeo, the world’s largest cost of living database, has also found that Melbourne residents have greater purchasing power and the lowest cost of living compared to any other Australian capital city.
According to federal and state government statistics, 35% of all Indian migrants prefer to come to Melbourne and unlike Sydney, migrants tend to stay in Melbourne rather than internally migrating to other parts of Australia after settling in. Since 2001, the number of Indian-born migrants in Melbourne has tripled.
Also, recent surveys have found that Melbourne has the lowest price for a plot of land on the eastern seaboard capitals (after all government fees were added in). This has led to the most affordable (as measured against local wages) eastern seaboard capital city to purchase in, and since most newcomers rent first, the data also showed that Melbourne was one of the cheapest capital cities in all of Australia for locals to rent in (only surpassed by Canberra & Darwin – where job prospects are much more limited).
Melbourne’s west is considered the epicentre of the new Indian immigrant community which are mostly families averaging at age of 31, with Indian businesses, temples, supermarkets, many festivals, and restaurants (including my favourite Indian dessert food truck – perfect for a late-night indulgence on the way home!). More recently two of the fastest growing areas in Australia (Wyndham shire and City of Melton), have had Indian candidates vying to represent their local communities and even winning seats on the local council.
In summary
The record low housing approvals, ever increasing land values, Melbourne being the preferred destination for so many immigrants for a wide variety of reasons, especially highly skilled Indian professionals with great borrowing capacity will lead to strong continuous property price growth and rental yields in highly desirable locations in Melbourne.
Resimax Group specialises in master-planned price controlled staged developments in high growth areas. It’s in-house builder, Tick Homes, specialises in efficiently building stylish, modern homes of the highest quality in Resimax Group estates. Customers buying through us can benefit from our unique ‘5/10/20 Guarantee’ of 5 years capital protection, 10 years rental guarantee, and 20 years structural guarantee on fixed priced, turn-key Tick homes. RGI members receive early access to projects well before public release.
Disclaimer: This article is for general information purposes only and should not be taken as advice. Always seek professional advice from suitably qualified professionals familiar with your situation and goals.
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Steven Molnar is Head of Research and Education for Resimax group. With over 25+ years in property and finance in Australia and internationally, he brings a unique perspective to his blogs with interesting property insights.