Green and Labor politicians in charge of their parties’ housing policies have denied that record levels of immigration are to blame for Australia’s housing affordability crisis, contradicting the views of some of the country’s most respected economists.
A record 548,8000 migrants moved to Australia in the year to September and this coincided with the rental vacancy rate at a record low of one per cent.
Sydney’s median house price also rose 11.7 per cent over the past year to an even more unaffordable $1.4 million, even after the Reserve Bank raised interest rates 13 times in 18 months to a 12-year high of 4.35 percent.
New South Wales had to accommodate 186,433 new immigrants in one year, or a third of the new arrivals to Australia, with most of them heading to overcrowded Sydney.
But Max Chandler-Mather, the Greens’ housing and homelessness spokesman, denied that high immigration is behind unaffordable housing during an appearance on the ABC quiz show on Monday night.
Green and Labor politicians in charge of housing policy have denied that record levels of immigration are to blame for Australia’s housing affordability crisis (pictured, houses in Oran Park, south-west Sydney).
“Politicians don’t want to talk about building public housing, they don’t want to talk about capped rents,” the Brisbane-based MP said.
“Planning is not the barrier to a housing crisis and, like immigration, it is a distraction used to avoid talking about things we know have worked in the past.”
Chandler-Mather said the 50 per cent capital gains tax discount introduced in 1999 for investor homeowners had caused house price rises to far outpace wage growth.
“We didn’t have the capital gains tax break and we didn’t have a tax system that encouraged people to treat housing as a huge, lucrative investment,” he said.
Chandler-Mather overlooked how net foreign immigration levels tripled between 1998 and 2008, rising from 88,781 to 315,700, before reaching new record levels since Australia reopened in late 2021.
NSW Housing and Homelessness Minister Rose Jackson suggested concerns about high immigration were an obsession for Sky News’ conservative political commentators.
‘The easy answers are always attractive: yes, let’s talk about immigrants. But you know, this isn’t Sky After Dark,” she said.
Jackson, an advocate for more social housing, also suggested her federal Labor counterparts review negative gearing and the 50 per cent capital gains tax discount.
Greens housing spokesman Max Chandler-Mather denied high immigration is behind unaffordable housing during an appearance on the ABC’s Q+A program on Monday night.
This is despite former federal Labor leader Bill Shorten losing the 2019 election promising to do just that, which also saw Ms Jackson’s husband, Sam Crosby, fail in his bid to win Reid’s inner seat Western Sydney.
“I’m in favor of everything that’s on the table,” he said.
“There’s one thing I won’t do, which is take the easy route for a state politician and say, ‘Well, actually, it’s a Commonwealth problem, they’ve got to fix their tax system and their immigration,'” he said.
AMP chief economist Shane Oliver has made a link between unaffordable housing and high immigration causing a housing shortage.
“The role of high levels of immigration cannot be ignored,” he said.
“There has been much discussion for years about poor housing affordability in Australia, but a debate about how immigration contributes to this problem is often missing.”
In the year to September, Australia built 170,215 homes and units, well below the net overseas migration level of 548,742 over the same period, Australian Bureau of Statistics data showed.
ABC financial commentator Alan Kohler, in his quarterly essay The Great Divide: Australia’s Housing Mess and How To Fix It, noted that accelerated immigration and the capital gains tax discount had caused house prices to exceed wage growth since 2000, when John Howard was Liberal prime minister.
“The increase in immigration under Howard was part of his industrial relations strategy to crush unions and suppress wage growth, and the crackdown on refugees was deliberately designed to cover it up, to make it look like the opposite was happening,” he said. .
“The other consequence of increased Howard immigration was a housing shortage, because there was absolutely no thought given to where the new arrivals could live.”
For decades before that, average full-time wages and housing prices had grown consistently at a similar pace.
Until the 1990s, an average full-time worker could still afford a mid-priced home in Sydney or Melbourne, during an era when annual net immigration levels were mainly in the five-figure range.
This meant that the average worker with a 20 per cent mortgage deposit could buy a typical house for less than six times their salary.
NSW Labor Housing and Homelessness Minister Rose Jackson suggested concerns about high immigration were an obsession for Conservative political commentators on Sky News.
Now in Sydney, someone with a median salary of $98,218 would not be able to buy a median-priced home valued at $1.396 million because this would involve borrowing 11.3 times income.
Banks are now reluctant to lend to anyone more than 5.2 times their salary, and a debt-to-income ratio of ‘6’ is considered risky.
The situation is so serious that someone earning $214,739 and borrowing $1.117 million would be in mortgage stress, paying 38 percent of their salary in mortgage payments, despite being among the 2.3 percent of who earn the most.
Mortgage stress occurs when someone spends more than 30 percent of their pre-tax salary servicing a home loan, which often means severe cuts to other life essentials.