Migrants are back and so is Burwood.

For many suburbs, not a lot will change quickly with net migration set to bounce back to 200,000 in 2022 already. For some suburbs, it will be a game changer and a return to conditions back in 2018 / 2019.

I had a look at the SA2 areas for Sydney and their net migration for 2018 and 2019 so pre covid. So the first assumptions are that migration will return in 2022 and on average a large number of migrants will behave as per previous migrants on arrival to Sydney. The visible trend is that they gravitate to apartment suburbs where reasonably priced stock is easy to find in area’s roughly 7-15km from the city.?

The area’s with highest rates of migrant arrivals in 2018 / 2019 were:

Parramatta (way out in front)

Burwood

Campsie / Canterbury

Hurstville?

Rockdale

A few general observations on these suburbs are:

Vacancy rates soared to about 6% during covid. A lot of people generalize that people wanted extra space and went to houses or regional which is in part true. I think a lot of people went home and additionally a lot of Airbnb stock came back to vacancy lists.?

Longer term vacancy % averages for all these suburbs are sub 2% so a good market for landlords when at that low level. Of late a good market for renters spoilt for choice.??

When new stock hits the market you see a bump up in vacancy rates for 1-2 years then the rate returns to normal as that stock is rented out. Where there is a continuous supply of new stock coming to market it may keep the vacancy rate higher for longer.?

I use vacancy rates a lot as a lead indicator for a few reasons. Obviously investors look at it as it is a good indicator of yield. The lower the vacancy rate, the less chance your investment property is vacant for a period of time and that is what happiness is for any investor. While investors make up only about 1/3rd of purchasers, they do contribute to the overall desirability of suburbs in terms of pricing. If people want to live in a suburb for any reason, the vacancy rates are lower.??

Burwood

Even though all these areas currently have vacancy rates of 3.5 - 4%, Burwood is a massive standout to me for a few reasons. Call it my pick to watch in 2022 for the migrant suburbs. While each of the listed features may not be 100% unique, in combination it is one to watch.?

Burwood is a long time established suburb with a tons of restaurants, shops, cinema’s, schools, etc. It has a vibrant mini downtown area all of its own. Its property prices already reflect the desirability as it is more expensive than some nearby suburbs on the same train line closer to the city.??

The Young brothers from AC/DC are from Burwood.?

It is a short express train ride to town. Not everyone works in town of course but it is geographically well situated to access a lot of Sydney.???

There is limited stock coming to market due to limited available land. By way of example, it took 18 years for the developers of the upcoming project for Victoria Place in Burwood to acquire the land for their next development to start construction in 2022.?

Parramatta takes in Westmead, Wentworthville and Granville so there are a lot of options for people including migrants looking to move to those areas. So it's not that migrants will not seek out these areas and have vacancy rates fall, it's just that Burwood will most likely do it faster.?

Same for Hurstville for example. There are a number of new apartments hitting that market in the next 2-4 years so again, rates will fall and there are some great apartment options coming through, but Burwood in my opinion will see the effect of migration faster.?

Burwood summary

Less stock, less vacancy, more amenity, more demand, higher prices.?