A flood of temporary visa holders into Australia has placed further strain on the nation’s chronic housing shortage.
The number of people entering on student, working holiday and Covid work visas has sky-rocketed by an additional 730,000 since Anthony Albanese was voted in as Prime Minister in May 2022.
This means the total of such visa holders jumped from round 1.8 million to approximately 2.5 million by the end of last financial year.
The figure equates to bringing in the combined population of the Gold Coast and Tweed Heads area of south east Queensland and northern NSW.
The bulk of the extra visas went to 418,000 students and graduates.
The number of people entering Australia on temporary visas has sky-rocketed since the end of the Covid pandemic (stock image)
Rental vacancies have fallen steeply around the country (pictured a queue for a property inspection at Bondi in Sydney)
There were also 108,000 extra working holiday makers, while 101,000 took advantage Covid work visa holders before the government abolished that category over rorting fears.
Meanwhile Australia’s rental vacancy rate recorded its steepest ever drop over the space of a year to be sitting 54 per cent below where it was at the start of the Covid pandemic, REA’s PropTrack Market Insight Report revealed.
In Sydney the rental vacancy rate sits at just 1.6 per cent, even as the city’s population grows by an average of two per cent every year.
The shortage in housing supply has also sent prices soaring.
Sydney’s median weekly unit rent in the year to July has surged by 24.1 per cent to $666.39 as equivalent house rent rose by 15.9 per cent to $963.92, SQM Research data showed.
For those lucky enough to think about buying, the city’s median house price has climbed to $1.334million, based on CoreLogic figures, which would put it well beyond the reach of an average, full-time worker earning $94,000 a year.
In August the Business Council of Australia (BCA), which represents millionaire corporate chief executives, argued that the influx of people into Australia is just a temporary rebalancing after the Covid period shut the borders.
BCA chief executive Jennifer Westacott said the shortfalls of the Covid closures of 2020 and 2021 were still apparent.
‘Our population is actually expected to be smaller than previously forecast irrespective of the current catch-up period of migration,’ she said.
But while the council recognised lack of housing supply as a ‘real problem’, it said migration was not the critical issue driving it and cutting numbers was not the solution.
‘The majority of Australians agree that migration is a benefit to Australia,’ the report said.
‘The proviso is that this must be properly planned and managed, including the provision of sufficient housing supply.’
Business Council of Australian CEO Jennifer Westacott argues that the migration surge is making up for the border closures during the Covid pandemic
The council highlighted poor-performing planning systems and restrictive zoning as a handbrake on new supply.
The report also noted a decline in the number of people per dwelling, as space became desirable during Covid lockdowns, added to the demand for housing even as the population shrunk.
The BCA welcomed the federal government’s efforts to reform the migration system, noting that slow and complex systems were holding the nation back as firms competed for the ‘best and brightest’.
However, in August AMP chief economist Shane Oliver said immigration-driven population growth was actually making Australians less productive, because it was not properly supported by public and other investment.
‘Very strong population growth with an inadequate infrastructure and housing supply response has led to urban congestion and poor housing affordability which contribute to poor productivity growth,’ he said.
He also argued that high population growth meant investors were buying homes for capital gain, to take advantage of a housing shortage, instead of ploughing their money into new business ventures or shares.
‘Increased speculative activity around housing diverts resources from more productive uses,’ he said.