Why Anthony Albanese needs to halve Australia’s immigration intake to solve the housing affordability crisis

Prime Minister Anthony Albanese is being urged to urgently halve the number of Australian immigrants to tackle the housing affordability crisis.

A record 454,400 foreigners moved to Australia in the year to March, on a net basis, as skilled migrants and international students flocked.

AMP chief economist Shane Oliver expects that annual figure to climb even higher to 500,000 when official population data for the June quarter is released.

He argued that the number of permanent and long-term immigrants needed to be reduced to 200,000 so that the supply of new housing could keep up, as the rate of population growth approached levels not seen since the 1950s.

“For years there has been a lot of discussion about the low cost of housing in Australia, but the debate about how immigration contributes to this problem is often absent,” he said.

Sydney’s median house price is now so high, at $1.36 million, that someone with a 20 per cent mortgage deposit would still need to earn $181,000 a year to avoid ending up in a situation of mortgage crisis, where a loan owed the bank at least six times his salary.

This means an Australian has to be in the top four per cent of earners just to afford an ordinary house in Australia’s most crowded city and be paid almost double the average full-time wage of $95,581.

The situation is also bad for renters, with SQM Research data showing the median house rent in Sydney at $978 per week, following an annual rise of 15.6 per cent.

Dr Oliver calculated that Australia could be short of up to 285,000 homes by mid-2024 as high immigration outpaced the pace of new house and apartment construction.

“There is no escaping the conclusion that immigration levels must be calibrated to the ability of the residential construction sector to provide housing,” he said.

“It’s critical. Current immigration levels far exceed the capacity of the housing sector to provide sufficient housing, exacerbating a severe housing shortage and low housing prices.

Dr Oliver stressed the government’s efforts to build more housing – including the $10 billion Housing Australia Future Fund – were difficult to achieve, given soaring construction costs.

“Increased immigration adds to the already large supply gap and threatens to overwhelm additional commitments made by governments,” he said.

State governments often have to foot the bills for a growing population, with New South Wales Premier Chris Minns saying planning rules needed to allow more apartments to be built in Sydney’s established suburbs to accommodate the growing number of people.

“It means more urban infill, it means more apartments and units,” he told the ABC 7:30 show Tuesday.

“My job is to create the infrastructure and eliminate the red tape that blocks this type of housing supply for the state.

“If we can get this going, and at least move in first on the East Coast, we can alleviate some of the housing issues, particularly those that young people face in New South Wales.”

Although Sydney is home to the vast majority of new migration, Mr Minns said he favored higher immigration – a position at odds with former NSW Labor premier Bob Carr, who had advocated lower immigration in the 1990s.

AMP chief economist Shane Oliver estimates that net overseas immigration needs to be halved, to 200,000, from 500,000 today, for housing supply to keep pace. rate of population growth.

“We support the Commonwealth Government’s decision to increase immigration to New South Wales, although we will welcome not the majority but the largest number of incoming immigrants,” he said.

“A lot of this workforce coming into the state will be directed into the housing market and we need it to build homes and apartments.”

Dr Oliver argued that Australia had been able to build 200,000 new homes per year in the five years to 2022 and that an annual net overseas migration intake of 200,000 was needed to closely match to the supply of housing.

Although lower than current levels, this type of annual net overseas admission would be comparable to that of a decade ago, when 206,000 migrants settled in Australia, taking into account permanent departures abroad. ‘stranger.

It would also be double the level in the late 1990s, before annual levels were regularly in the six-figure range.

Australia’s population grew by 2.2 percent in the year to March, but Dr Oliver expects that figure to rise to 2.5 percent, which would be the fastest growth in years. Post-war 1950s.

Dr Oliver calculated that Australia could be short of up to 285,000 homes by mid-2024, as rising immigration outpaced the completion of new houses and apartments (pictured, construction at Oran Park, in south-west Sydney).

Australia now has 2.1 million temporary visa holders and employers fear potential new rules, making it easier for sponsored skilled migrants to change jobs, could see an influx from regional areas to already overcrowded capital cities, with a higher proportion of foreign-born residents. .

Shadow Immigration Minister Dan Tehan, who represents an electorate in western Victoria, said regional areas would be left without nurses, aged care staff, teachers, mechanics and chefs, because possible visa changes would lead to even greater overcrowding in large cities.

“More migrants will move to Australian capital cities, further exacerbating the housing shortage and rental crisis,” he said.

“Changes to the world of work will see Australians in regional communities lose access to key services while residents in capital cities will face higher rents, greater congestion and increased demand for government services, such as hospitals and schools.”

Australia’s population grew by 2.2 percent in the year to March, but Dr Oliver expects that figure to rise to 2.5 percent, which would be the fastest growth in years. Post-war 1950s.