Economists find link between Chinese immigration levels and Australian house prices

Many people are talking up the effect of Chinese buyers on Sydney property prices. Up until now, however, we haven’t been aware of any attempt rigorously to quantify that effect.

A report just released by Citi Research attempts to do just that, looking at (and factoring into its forecasts) the effect of Chinese immigration on house prices in Australia. Authors of the report, Paul Brennan and Josh Williamson, found that shifts in levels of Chinese migration were consistently reflected, three years later, by changes in property prices. Put very simply, if there is an increase in Chinese immigration to Australia, this increase will cause Australian house prices to rise three years later, and vice versa.

Citi Research’s modelling also plays down the risk of a new housing bubble forming in Australia. Under its baseline scenario (as reported by, it forecast house prices to rise 3% between now and March 2014, before a 2% correction driven by lower Chinese immigration, a weaker Chinese economy and a lower Australian dollar.

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