God, what has happened to Australian brains?
Australia will fall well short of its target to build 1.2 million homes over five years and should consider boosting the intake of skilled construction workers to help solve the problem, according to property analysts and economists.
As part of its new migration strategy, Labor has excluded foreign tradies from a visa fast track system stream. But a panel of 14 experts polled by The Australian Financial Review’s quarterly property survey has warned the country is already lagging the ambitious target set by federal and state governments in August to address the shortage of accommodation which has sent rents skyrocketing.
“The exclusion of construction sector workers from the new ‘specialist skills pathway’ for temporary skilled migration appears at odds with the government’s goal of building 1.2 million homes given a lack of labour is a key constraint for the sector,” Jarden chief economist Carlos Cacho said.
“The biggest issue for new housing supply in our view is cost and affordability. Between land costs, construction costs and borrowing capacity the typical buyers of new build housing cannot afford it.”
So, the answer to the lack of affordability driven by immigration is to pump demand and squash wages with more migrants?
Why not assert that a Giant Elvis will fix the thing?
If you have an affordability problem in housing driven by excess migration, then the answer is, obviously, fewer migrants:
- to reduce demand
- to reduce building material costs
- to reduce house prices and interest rates (throw in some macroprudentuial policy)
- to boost broader wages
Only Shane Oliver made any sense, and not even he made much:
AMP chief economist Shane Oliver said even the forecast reduction in immigration to 375,000 in the current year and 250,000 in the next were well in excess of the pre-COVID average of 230,000, which was in itself too high relative to the economy’s capacity to supply new homes.
“Ideally immigration needs to be cut back to around 200,000 a year to enable us to bring down the accumulated housing shortfall and improve housing and rental affordability,” he said.
We need an immigration freeze, with only family and refugee intakes intact, to lower numbers well below 100k.
Only that will bring the market into balance over a few years.
The AFR article is not a debate, journalism, analysis or policymaking. It’s not even gaslighting.
It’s chimpanzees playing with machine guns.
