Australia’s population growth will drop significantly—at least, that’s what the federal government thinks is going to happen. Budget documents reveal the government’s predictions of 0.2% growth this year and 0.4% next year, which would be the slowest growth in a century.

Immigration and population growth are significant price drivers of property, especially investor stock. So how will property prices be affected?

The drop in population growth is mainly due to border closures, and the lack of international arrivals. A significant portion of this international immigration is international students, who rent properties while attending university.

So the markets that will be hardest hit will be inner-city apartments, especially cheap stock aimed at young renters and students.

Plus, properties aimed at owner-occupiers will be supported for a long time by the ongoing stimulus supports.

What I expect to see happen is a larger division between good quality property in good quality areas and average property in average areas, so if you’re looking to invest or get into the market, stick to those basic principles.