Immigration “the biggest single driver of housing demand”

It seems like an obvious and non-controversial statement: in developed nations with low birth rates, immigration is the key driver of household formation and structural housing demand.

Immigration should, therefore, be front-and-centre of policy makers’ minds when attempting to solve shortages in housing and/or affordability concerns.

Strangely, however, policy makers and commentators tend to ignore the immigration elephant and instead focus on the supply-side, despite the fact that in high immigration nations like Australia and New Zealand, high rates of household formation is the primary cause of supply problems.

With this background in mind, it is encouraging to see’s Greg Ninness call on Jacinda Ardern’s Labour Party Government “to consider immigration’s effect on housing demand before it starts reopening the borders”:

If we are going to solve the housing crisis we need to take a serious look at the effect immigration has on housing demand.

That’s because immigration is the biggest driver of New Zealand’s population growth, which means it’s probably also the biggest driver of demand for housing…

It will also affect the demand for social services such as health and education and the need for other infrastructure such as transport and utilities.

Two of the biggest beneficiaries of high levels of immigration are employers and the tertiary education sector, so it is not surprising that they are often at the vanguard of promoting mass immigration policies. However the costs of those policies, such as pressures on housing and other infrastructure, must be borne by the wider population.

Truer words have never been written. The situation is exactly the same in Australia where 100% of Australia’s future population growth is projected by the ABS to come from net overseas migration (NOM) – either directly as migrants disembark the plane or indirectly when migrants later have children (counted as ‘natural increase’):

The 17.5 million population growth projected for Australia between 2016 and 2067 – all via NOM – will require roughly 7 million additional homes to be built over that time.

Thus, any talk about ‘housing affordability’ or ‘housing shortages’ must address the mass immigration issue, since it is the key long-term structural driver of these problems.

Unconventional Economist
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  1. Meanwhile, in the short-term, we have nil immigration and housing running “white-hot”. What’s the next hottest colors on the insanely hot end of the scale in preparation for immigration kicking in to ludicrous levels?

  2. Kill the folklore about ‘high prices’ for shelter being good.

    Politicians are only upholding the high prices because they know that’s what the greater public want and it’s a vote winner.

    Perhaps include the primary residence in the pension asset test and you’ll see less boomers cheering on ever higher house prices.

      • The duopoly, plus Nats, Greens, and fake minors and fake independents have the weight of any vote. the Greens are own goals, the rest owned by the plutocracy

        Like any others who give a fuch younger voters see noone different to vote for. That cnt Hawke when in control of the Senate had a big review into the electoral system but he decided it was just fine the way it was… bipartisan spirit and all that crap. What a sell out waste of space that bastard was.

        • Most young voters aggressively support Labor and Greens instead of rioting.

          It’s laughable. They have no one to blame but themselves.

          Most of my mates loved Hawke, I didn’t, and I couldn’t put my finger on why. Now much older and wiser, it’s obvious.

          • The suited spiv that put Australia in a death spiral. Labor still talk him up.

            Multi multi multi millionaire, while Australian kids can’t get a job or buy a house.

        • Why do you assume that young people specifically need someone to vote for? Sustainable Australia have quite sensible policies, but they can’t widely publicise them because they don’t have corporate donors. But even without them or like-minded independents, young voters could do a lot of good by just disrupting the major parties. Just put the neoliberal/Big Australia parties last, regardless of whoever is running against them. Put the sitting member last of all, and put the party that is in government last in the Senate. Just think of government changing hands like a ping pong ball if this happens in enough marginal seats.

          • All voters need someone to vote for! That’s how voting should be but many can’t vote for someone they actually would want. The system is how it is by design not by voter choice.

            “young voters could do a lot of good” But they don’t, won’t, and of course like anybody else can’t.

            “Just put the neoliberal/Big Australia parties last…”

            It’s a duopoly. Regardless of parties swapping seats plutocrat pwned government stays the same.

      • kierans777MEMBER

        Do you have proof for such a claim? As I understand the demographics, the Boomers still have the weight in the ballot box.

  3. There’s one more piece to this puzzle. If we address these issues of housing affordability/shortages through immigration, it would expose one more sector, that is … construction and all those employed by it.

    If we reduce immigration, we then also need to reduce the amount of dwelling’s constructed, this leaves us with an excess supply of unemployable blue collar workers, we have no other labour intensive industry.

    What do we do with this situation is the ?

    • Um, we could replace all the foreign born uber eats riders who don’t have citizenship and work in excess of their visa situation??

      • Yeah, Nah, not my thing to ride around on push bike and deliver food to … fat ass lazy fau-ks. If it was up to me I’d shut down that whole industry. Go out and get your own food, get society buzzing and social in the right way.

  4. Goldstandard1MEMBER

    I thought we all agreed that governments telling banks to not call ANY loans in, plus printing money, plus zero interest rates were the biggest drivers.
    Thankfully all it’s done is blow the Hindenberg up more because it can’t last much longer……really. Something is bound to break this year. It’s currently the roaring 20’s….for one year but the fundamentals of the economy are already terribly poor

    • Yeah … plus all those whining australians coming home, they’re creating housing demand also.
      It’s unsustainable. Every resource available to buy a home is being exhausted.

  5. Leith; how can you possibly form this conclusion when the borders are shut and property didn’t crash?

    Your statement is just so wrong I don’t know where to start.

    The single biggest driver of housing demand is the price and supply of credit end of story.

      • Did you even read my comment? The borders have been shut 12 months. Zero or next to zero migration thus massive drawback of population. What has happened? Cost and supply of credit both loosened. What has happened? We’re off to the races again.

        What happened to NZ last year also? Biggest boom ever with ZERO migration.

        Even without interest rates being cut to zero I doubt it would have had a large impact on the existing property market as rates were low enough anyway.

        Granted, years upon years of sustained low migration may alter the equation again but the same rubbish tax system propping up demand still exists and this country has proven itself to be a greedy property narco state regardless of any new migrants who wish to come here. It’s culturally engrained.

  6. – Earth calling Leith van Onselen: Immigration is NOT the driver behind the demand for housing !!!!!

  7. Agree. Fits MB’s catering to ageing white RWNJs and radical right libertarians to act out their Malthusian enthusiasms, not unlike eugenics blaming the lower orders and immigrants for Australians own love for fossil fuel and emissions….