Short-term arrivals into Oz have recovered (China rising!)

More trips Down Under

February was landmark month for short-term visitors into Australia, with 943,000 trips representing an increase of +19.7 per cent from last year.

And, notably, short-term arrivals are now +1.7 per cent higher than the equivalent pre-COVID level of February 2019. 

Thus after a long six years the recovery in visitor arrivals is now largely complete.

It was interesting to note that Lunar New Year saw more than 220,000 trips from China in February.

This was also above the pre-COVID highs, and not too far off the record number of trips from China in February 2018 of 226,000. 

Including permanent and long-term arrivals, there were some 266,000 arrivals from China in February, which was an all-time high. 

Australia's relationship with China cooled and then deteriorated badly between around 2017 and 2022, but has steadily recovered since the election of PM Anthony Albanese, and trade barriers have been gradually removed. 

Over the year arrivals from China are still below the pre-pandemic highs, but on this evidence they seem to be recovering in a robust manner now. 

Immigration eases slightly

Permanent and long-term arrivals into Australia recovered to pre-pandemic levels long ago, and have been tracking at record highs.

February is always a huge month for permanent and long-term arrivals into the country, and the figure for 2026 was no exception at 152,000.

This was a bit below the highest ever figure for a single month of 159,000 recorded in February 2025, but was still almost a third higher than the 2019 figure. 

There were also more departures this year, taking the net long-term arrivals for the month to +96,000 (for the third highest February on record). 

The net figure for permanent and long-term arrivals over the year eased to +478,910. 

The wrap

It's been a long road back for tourism and short-term trips into Australia since 2020 and 2021 when arrivals were close to zero per month.  

With trips from China rebounding to record highs, tourism in Sydney and Melbourne looks set to thrive again. 

Permanent and long-term arrivals are just off their highs, but remain at elevated levels, meaning that rents are likely to surge further in 2026 as rental vacancy rates remain extremely tight.

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Confidence crashes...along with rental vacancies

Confidence crunch

Westpac's consumer confidence index had already crashed by a further -12½ per cent by last month to sit unnervingly close to all-time lows,

Meanwhile NAB's business survey showed a "staggering" collapse of -29 points on the business confidence index. 

Maybe not all that surprising, you might say, but you can read the details from Westpac here and here. 

Rental reacceleration

In other news, SQM Research released its latest rental markets data, which showed asking rents in Sydney rising by a further 0.9 per cent in the month to be 7.4 per cent higher than a year earlier. 

Melbourne, Brisbane, and Perth also showed large increases in rents over the year, while Hobart and Darwin recorded double-digit increases in asking rents. 

In the month of March there was a notable and significant drop in rental vacancies in Sydney from 9,491 to just 8,469, or a rental vacancy rate of just 1.1 per cent.

Source: SQM Research

Rental vacancy rates remained extremely tight in Brisbane (0.8 per cent), and fell even further in Adelaide (0.7 per cent), Perth (0.5 per cent), Darwin (0.4 per cent), and Hobart (0.4 per cent). 

The big bear case for nominal property prices in 2026 is centred around rising interest rates, but providing some support are now extremely low rental vacancy rates, steepling construction costs, and - to date anyway - an unemployment rate of just 4.3 per cent. 

Rental vacancy rates looks set to fall further as interest rates rise and as the government threatens a property tax overhaul at the May Budget.

Louis Christopher of SQM Research commented:

"The national vacancy rate dropping to 1.0% highlights just how tight Australia’s rental market has become. We are now seeing vacancy rates at critically low levels in several cities, particularly Perth, Darwin and Hobart. 

While some markets are showing brief pauses in rental growth, the overall trend remains upward due to the ongoing imbalance between supply and demand. 

Without a significant increase in new housing supply and/or a stabilisation of population growth rates, it is likely that rental pressures will remain elevated throughout 2026. These accelerated rates of rental increases will no doubt feed through to the CPI at some point this year.”

You can read SQM's media release here. 

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Rentals remain extremely tight

Rentals remain tight

Cotality released its latest Monthly Chart Pack, which still had housing values up +2.1 per cent over the March quarter, and +9.9 per cent over the year. 

Source: Cotality

The flow of new listings was, surprisingly, lower than average for the time of year. 

Total listings were also -11.5 per cent lower than a year earlier, meaning that it's still often tough to find quality properties for sale. 

Rental markets remained extremely tight, with rental vacancy rates near all-time lows, and rents rising +5.7 per cent over the year to March.

This is before potential tax reform to be delivered in the May budget, which may target capital gains tax on investors. 

Source: Cotality

You can download the latest Chart Pack here.

---

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My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

4. Work with me privately

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Ceasefire

Markets boost, oil falls

Markets got a huge confidence boost overnight on the announcement of a two-week ceasefire with Iran, though to be fair we have heard a similar sort of rhetoric before.

Australia's 3-year bond yield finished today around 11 basis points lower at 4.56 per cent, as Brent crude oil prices plummeted by $20 per barrel to $95, while the ASX 200 closed up by a hearty 2.55 per cent.

How long the initial markets euphoria lasts is less clear. 

Futures markets are still looking for a little less than two further interest rate hikes in Australia to get inflation back under control, while there's not yet any clarity around how and when oil supply begins to flow more freely again. 

Dwelling starts rise again

In other news, dwelling commencements got a strong uplift in the December 2025 quarter, rising by 8 per cent to around 53,600 seasonally adjusted.

This was the best quarter since 2021.

Still the pace of actual dwelling completions remained very slow at 43,500 in the quarter, seasonally adjusted.

Currently we're on track for around 875,000 dwelling completions over the five years from 1 July 2024, or less than ¾ of the government's 1.2 million homes Housing Accord target.

With housing project development remaining so slow, the number of homes under construction increased to around an elevated 236,000.

The standout sectors of the market have been detached houses in Perth, and a surge of new units under construction on the Gold Coast in south-east Queensland.

In the December 2025 quarter a decent chunk of the units approved in Sydney and New South Wales moved from the approved stage to breaking ground. 

The wrap

Overall, there are now a lot of dwellings under construction in Western Australia and parts of south-east Queensland, but the rate of actual dwelling completions remains well below par.

With the Iran War since interrupting progress in 2026, the laggardly pace of construction versus population appears set to continue for another year. 

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Podcast: Fuel shock, inflation and higher rates are pushing Australia to the tipping point

Property podcast

Lots to discuss on the podcast with Chris this week!

In fact, it has been our most downloaded episode to date, reflecting the uncertainty in today's markets.

Here's what we discussed:

– Fuel shock intensifying: shortages emerging and diesel pushing above $3 per litre
– Fuel excise cut unlikely to offset rising costs as supply remains constrained
– Markets now pricing rates toward 4.6% – 4.85%, with further hikes expected before easing in 2027
– Build feasibility deteriorating rapidly
– Consumer confidence collapsing!
– Two-speed market forming: entry-level demand holding, premium segments weakening
– Housing shortfall widening
– Listener Q&A: portfolio strategy and capital allocation in uncertain conditions

You can tune in here (or click on the image below):

You can also watch the YouTube version here:

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Unemployment rate heading to 5pc

Unemployment set to rise

Job vacancies were also rebounding a little up until February 2026, rising 2.7 per cent to 337,900 over the 3-month period. 

This means that up until February there were still fewer than 2 unemployed persons per job vacancy - historically speaking a very low ratio. 

Job vacancies rebounded to rise in 7 of the 8 states and territories over the quarter, with only South Australia recording a very modest decline.

Still, with the labour force swelling by 312,000 over the year, it looks like that was some potential upside for the unemployment rate.

Since the end of February consumer sentiment has collapsed to the lowest level in the history of surveys since 1972, so there is now an increasing likelihood that the unemployment rate will naturally rise towards 5 per cent according to many economic forecasts.

In other news the Australian PM announced further fuel price relief, but with apparently little progress having been made towards the resumption of oil supply markets have shifted into risk-off mode. 

---

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Dwelling approvals rebounded...before the war

Approvals rebound

The number of attached dwelling units approved, having dumped quite spectacularly in December and January, promptly doubled in February.

The monthly jump was largely due to approvals in Melbourne rising from 479 to 2,761.

Over the past year, though, Sydney and Melbourne have seen a muted supply of attached dwellings in the pipeline. 

The strongest trend has been across Greater Brisbane, and especially the Gold Coast.

House approvals have been subdued almost across the board, with the uptrend essentially all being driven by new housing being approved for undersupplied Perth. 

Piecing it together, there were around 19,000 dwellings approved in February, seasonally adjusted, and looking through the noise the monthly trend had increased to around 17,500 before the war. 

Over the year around approximately 196,000 dwellings were approved. 

A very solid month!

Unfortunately approvals will now fall away again as the year goes on due to rising interest rates, materials costs, and labour availability. 

---

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And our popular Low Rates High Returns Show also remains available on Spotify.

    3. Subscribe for my free daily blog

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My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

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Early downturn for Melbourne & Sydney

Prices ease in Mel/Syd

Housing price rose 0.7 per cent in March 2026 according to Cotality, but with prices down a little in Sydney and Melbourne. 

Quarterly prices were up by 2.1 per cent, to be 9.9 per cent higher over the year.

Prices in Perth and Brisbane continued to power on.

Source: Cotality

The decline for the largest two capital was driven by detached houses in Sydney (-0.3 per cent) and Melbourne (-0.3 per cent), but with unit prices still in positive territory. 

The  price declines were driven by the most affluent areas, such as Melbourne's east and south-east, and for houses in Sydney's eastern suburbs and north shore.

However, properties in the lowest price quartile as still performing relatively well. 

Source: Cotality

Meanwhile, the rental market saw rental prices rise 2.1 per cent over the quarter, for the fastest increase since May 2024.

It look as though the rental market is re-accelerating still. 

Source: Cotality

Cotality noted that a sustained lift in housing supply looks unlikely with high materials and labour costs, while rising interest rates hamper feasibility further. 

You can see and download Cotality's full report here. 

---

1. Download our property buying guide

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    2. Subscribe to our Top 10 Podcasts for Investors

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The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 50,000 audio downloads per month, and growing fast.

And our popular Low Rates High Returns Show also remains available on Spotify.

    3. Subscribe for my free daily blog

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By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here. 

My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

4. Work with me privately

For a limited time you can book in a free diagnosis call with me here, so book in a call today.