High immigration risks causing a “humanitarian disaster” by making housing even more unaffordable as supply fails to keep pace with population growth, a think tank says.
A record 518,000 people moved to Australia in the 2022-23 financial year, putting net overseas migration at levels more than double the 200,000 level of the mining boom in 2007.
But housing supply is failing to keep pace with demand, with private sector housing approvals falling 9.9 per cent in January, the Australian Bureau of Statistics revealed this week.
This calls into question Prime Minister Anthony Albanese’s promise, with state and territory Labor leaders, to build 1.2 million homes over five years from July.
High immigration has caused a “humanitarian disaster” by making housing unaffordable as supply fails to keep pace with population growth, think tank says (pictured, Sydney’s Wynyard train station during rush hour)
Daniel Wild, deputy director of the Institute of Public Affairs, said high immigration meant Australia would struggle to accommodate an influx of population.
“Governments at all levels are preparing Australia for an economic and humanitarian disaster, as the latest housing approvals show we are simply not building enough homes for first-home buyers and new immigrants, despite the influx. record,” he said.
Wild said the drop in construction approvals, amid higher costs, highlighted “the real-world consequences of record, unplanned levels of migration.”
“Despite repeated warnings, the federal government continues to step on the accelerator of migration while slowing down housing approvals,” he said.
In the year to January, only 99,759 new private homes were approved, including 7,461 in the first month of 2024.
Given that Australian households house an average of 2.5 people, that would only be enough to house 249,398, before taking into account new apartments.
The IPA estimated Australia would have a net housing supply shortfall of 252,800 homes in the six years to 2028, even as immigration slowed from recent record highs.
With a fertility rate of just 1.7, or below replacement level of 2, Australia relies on high immigration to have a working-age population for tax purposes and to fill labor shortages.
“Record, unplanned migration has failed to address Australia’s worker shortage crisis – the very thing the federal government is using to justify such rapid increases in intake,” Mr Wild said.
“It is clear that this lazy approach to solving the worker shortage is not working and there should be a greater focus on getting Australian retirees, veterans and students into work.”
Sydney’s median house price of $1.395 million is out of reach for anyone earning less than $200,000 a year, whether individually or as part of a two-income couple.
Someone with an average full-time salary of $98,218 can only buy a house worth up to $639,000 if they have a 20 per cent mortgage deposit.
Daniel Wild, deputy director of the Institute of Public Affairs, said high immigration meant Australia would struggle to accommodate an influx of population (pictured are houses under construction in Oran Park, in Sydney’s outer south-west).
This is based on RateCity’s calculation that banks can lend someone 5.2 times their salary, with the Reserve Bank of Australia’s cash rate now at a 12-year high of 4.35 per cent.
A single mother who wants to live in a house instead of a unit has fewer options, and ZIP codes in flood zones are more affordable.
This means being able to buy a cheaper home in Gorokan, a flood-prone location on the New South Wales central coast, 113 kilometers north of Sydney, where the median price is $686,487, CoreLogic data showed.
In Brisbane, where the median house price is $899,474, someone wanting a home 12 kilometers from the city center would only have a choice in Rocklea, another flood-prone area, where the median price is $624,714.
In Brisbane, where the median house price is $899,474, someone wanting a home 12km from the city center would only have a choice in Rocklea, another flood-prone area, where the median price is $624,714 (March 2022 floods are shown in the photo).