Australia would struggle to accommodate more than 74,000 new foreign migrants as building approvals fell to the lowest level in more than a decade and will be unable to keep pace with rapid population growth.
A campaigner against excessive immigration has warned that this will force more young people to live with their parents for longer due to a housing shortage.
This is happening as more construction companies go bankrupt, which could lead to more homelessness as the supply of new housing lags behind demand.
In the year to February, bodies such as councils approved 162,751 new homes, covering the total number of homes and private units, new Australian Bureau of Statistics data released on Thursday showed.
But with 481,620 migrants moving to Australia in the year to January, on a net basis, that would leave 74,742 migrants struggling to find somewhere to live as international students compete for rental accommodation.
Australia would struggle to house more than 74,000 new foreign migrants as building approvals fail to keep pace with rapid population growth (pictured, a Bondi rental queue)
That’s based on the average household size of 2.5 people according to the latest 2021 census.
Australia’s latest annual building approvals figure is even weaker than the housing completion figure of 170,215 in the year to September.
Both building approvals and levels of construction activity are significantly below Labour’s annual target of 240,000 over five years.
Migration Watch Australia founder Jordan Knight, 29, said last year’s record immigration meant many young people were unable to move home, with a rental vacancy rate of just one per cent.
“It’s a simple mathematical question: if you add too many people to a really tight housing market, a lot of people will suffer a lot and prices will skyrocket,” he told WhatsNew2Day Australia. .
‘Not only will housing prices be forced to rise due to excess demand, but people will be forced into worse living conditions.
“This will mean people will continue to live with their parents for longer, it will mean people will share housing for longer, it will mean people will live five people to a room.”
In an alarming development, building approvals for private units in February fell 25 per cent to a 12-year low, casting doubt on Prime Minister Anthony Albanese’s plan to build 1.2 million homes in five years.
Commonwealth Bank senior economist Belinda Allen said weak construction activity was causing Australia’s rental crisis.
“Australia is not building enough housing,” he said.
‘Capacity constraints and rapidly rising costs are impacting the residential construction industry.
Migration Watch Australia founder Jordan Knight, 29, said last year’s record immigration meant many young people were unable to move home, with a rental vacancy rate of just one per cent.
“We are seeing the impact pass through to the prices of used homes and the rental market.”
Only 3,771 units were approved in February, compared to 8,404 homes, or 12,520 new homes, in the month when public housing was taken into account.
Overall, annual construction approvals are at the weakest level since 2013, by one measure.
Knight said it was naive to expect housing supply could increase to meet the growing demand for housing arising from increased immigration.
“Building an apartment block requires, at best, two or three years; we already have a deficit of hundreds of thousands,” he said.
‘This is going to get a lot worse before it gets better.
“The best lever governments can use now to alleviate the housing crisis is to turn to immigration to alleviate demand.”
Higher construction costs have also led to an increase in the number of construction companies going bankrupt.
“There is already a huge deficit,” he said.
In the year to February, 162,751 new homes were approved, covering the total number of homes and units, new Australian Bureau of Statistics data released on Thursday showed (pictured, homes in Oran Park, in southwest of Sydney).
“It looks like chaos is coming because it’s bad now, it’s going to get worse and with builders going bankrupt, this will mean more people will become homeless.”
A record 548,800 migrants, on a net basis, moved to Australia in the year to September.
The level slowed to 481,620 in January, but is still well above the Treasury forecast of 375,000 for 2023-24 made in December’s Mid-Year Economic and Fiscal Outlook.
Construction approvals in Australia fell 1.9 per cent in February, following a 2.5 per cent drop in January.
This marked the third consecutive month of decline, with monthly construction approvals down 5.8 percent compared to a year ago.