Prime Minister Anthony Albanese is being urged to urgently halve Australia’s immigration intake 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 flooded in.
AMP chief economist Shane Oliver is expecting that annual number to climb even higher to 500,000 when official population data for the June quarter is released.
He argued the permanent and long-term overseas intake needed to be slashed to 200,000 so the supply of new housing could keep up, as the population growth pace approached levels unseen since the 1950s.
‘For years now there has been much discussion about poor housing affordability in Australia but debate about how immigration contributes to this issue is often lacking,’ he said.
Prime Minister Anthony Albanese is being urged to halve Australia’s immigration intake to tackle the housing affordability crisis (pictured is Sydney Wynyard train station)
Sydney’s median house price is now so dear, at $1.36million, that someone with a 20 per cent mortgage deposit would still need to earn $181,000 a year to avoid being in mortgage stress, where a borrow owed the bank at least six times their salary.
That means an Australian needs to be in the top four per cent of income earners just to afford an ordinary house in Australia’s most overcrowded city, and be paid almost double the average, full-time salary of $95,581.
The situation is also bad for tenants with SQM Research data showing Sydney’s median house rent at $978 a week, following an annual surge of 15.6 per cent.
Dr Oliver calculated that Australia could be up to 285,000 homes short by mid-2024, as surging immigration outpaced the completion of new houses and apartments.
‘It’s impossible to escape the conclusion that immigration levels need to be calibrated to the ability of the home building industry to supply housing,’ he said.
‘This is critical. Current immigration levels are running well in excess of the ability of the housing industry to supply enough homes exacerbating an acute housing shortage and poor housing affordability.’
Dr Oliver pointed out government efforts to build more houses – including the $10billion Housing Australia Future Fund – were hard to achieve, given the surge in building costs.
‘The surge in immigration is adding to the already large supply shortfall and threatening to swamp the extra supply commitments governments are making,’ he said.
State governments are often left paying the bills for a rising population with NSW Premier Chris Minns declaring planning rules had to allow for more apartments in established Sydney suburbs to house the surging number of people.
‘It means more urban in-fill, it means more apartments and units,’ he told the ABC’s 7.30 program on Tuesday.
‘My job is to create the infrastructure and get rid of the red tape that’s blocking that kind of housing supply for the state.
‘If we can get that rolling, and at least come first on the east coast, we can ease some of the housing challenges, particularly young people face in New South Wales.’
Despite Sydney housing the vast bulk of new migrations, Mr Minns said he supported 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 says net overseas immigration needed to be halved to 200,000, down from levels close to 500,000 now, so housing supply could keep pace with population growth
‘We’re supportive of the commonwealth government’s decision to lift immigration into New South Wales, notwithstanding the fact that we’ll take, not the majority but the greatest number of inbound immigrants,’ he said.
‘A lot of that labour coming into the state will be directed to the housing market and we need them to build houses and apartments.’
Dr Oliver argued Australia had been able to build 200,000 new homes annually in the five years to 2022 and an annual net overseas migration intake of 200,000 was needed to closely match housing supply.
While lower than present levels, that kind of annual net overseas intake would be comparable with a decade ago when 206,000 migrants moved to Australia, with permanent overseas departures factored in.
It would also be double the level of late 1990s, before annual levels moved consistently into the six-figure range.
Australia’s population grew by 2.2 per cent in the year to March but Dr Oliver is expecting that to rise to 2.5 per cent, which would be the fastest growth since the post-war 1950s.
Dr Oliver calculated that Australia could be up to 285,000 homes short by mid-2024, as surging immigration outpaced the completion of new houses and apartments (pictured is construction at Oran Park in Sydney’s outer south-west)
Australia is now home to 2.1million temporary visa holders and employers are worried potential new rules, allowing sponsored skilled migrants to more easily switch jobs, could see an influx from regional areas to already overcrowded capital cities, with a higher proportion of overseas-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 as potential visa changes led to even more overcrowding in big cities.
‘More migrants will move to Australia’s capital cities, further worsening housing shortages and the rental crisis,’ he said.
‘Labor’s changes will see Australians in regional communities lose access to key services while people living in capital cities will face higher rents, worse congestion, and more demand on government services, like hospitals and schools.’
Australia’s population grew by 2.2 per cent in the year to March but Dr Oliver is expecting that to rise to 2.5 per cent, which would be the fastest growth since the post-war 1950s