Jason Falinski: Immigration has no impact on housing supply

Liberal MP Jason Falinski, who is the chairman of the parliamentary inquiry into housing affordability and supply, has penned a contradictory propaganda piece in The Australian claiming that Australia’s housing woes are caused entirely by a ‘lack of supply’, which is supposedly unaffected by mass immigration:

For years governments, through inaction or special interest lobbying, have denied young Australians their chance at the Australian dream.

The longer the Tax and Revenue Committee investigated housing affordability, the more apparent it became that the usual scapegoats are convenient distractions from the real reasons for this intergenerational theft.

The planners and academics blamed migrants for high house prices. But in the last two years, prices climbed by over 20 per cent while our immigration intake was zero…

[There’s] one inconvenient truth: our affordability challenge comes down to not building enough homes.

This is economics 101 – Marshall’s supply and demand curves. The Centre for Independent Studies, Grattan Institute and CoreLogic all demonstrated that Australia has been under-building for years…

The NSW Treasury noted that to just keep pace with demand, NSW needed to build 42,000 houses a year. Housing targets are short of this…

Shifting the blame to other governments, migrants, investors and builders is just part of their game, while the rest of us suffer the consequences of our nation being unmade before our very eyes.

Falinski argues that “in the last two years, prices climbed by over 20 per cent while our immigration intake was zero”, yet conveniently fails to acknowledge that the federal government’s own National Housing Finance & Investment Corporation’s (NHFIC) flagship report on housing supply and demand forecast that “cumulative new supply is expected to be around 93,000 higher than new demand by 2025”, thanks to the fall in immigration (see next chart).

Moreover, the migrant epicentres of Greater Sydney and Greater Melbourne were forecast by NHFIC to experience the biggest surpluses of housing supply:

Thus, if immigration is not to blame for the recent run-up in prices, then neither is the scapegoat that we are “not building enough homes”.

As I illustrated in my submission to the parliamentary inquiry into Housing Affordability and Supply, “any housing supply problem is first and foremost an excessive immigration problem”.

Australia’s net overseas migration (NOM) jumped from an average of 90,500 between 1991 and 2004 to an average of 219,000 between 2005 and 2019 – representing an annual average increase in immigration of 140%.

This jump in immigration was the primary reason why “Australia has been under-building for years”.

But after immigration collapsed thanks to COVID, Australia’s ‘housing shortage’ miraculously disappeared, as illustrated by NHFIC above.

Looking ahead, the latest Intergenerational Report (IGR) projects that net overseas migration (NOM) will ramp up to 235,000 people a year for decades to come:

This extreme immigration is projected in the IGR to increase Australia’s population by 13.1 million people (~50%) over the next 40 years to 38.8 million people – equivalent to adding another Sydney, Melbourne and Brisbane to Australia’s existing population.

Australia's projected population growth

Such a population deluge will guarantee that housing demand swamps housing supply, resulting in worse affordability. It will also consign future Australians to live in high-rise shoe boxes:

Sydney dwelling composition

Jason Falinski should be honest and admit that the single best thing the federal government can do to ‘solve’ any housing supply problem is to ensure that immigration does not return to its manic pre-COVID level, nor is raised to the insane 235,000 annual NOM projected by the IGR.

Sadly, Falinski has chosen to gaslight us instead by pointing the finger at housing supply, while denying the primary driver of the ‘lack of supply’: mass immigration.

The first goal of public policy should be to protect the welfare of existing residents and not make a problem worse. ‘Big Australia’ immigration violates this very principle.

Unconventional Economist

Comments

  1. happy valleyMEMBER

    “Sadly, Falinski has chosen to gaslight us instead by pointing the finger at housing supply, while denying the primary driver of the ‘lack of supply’: mass immigration.”

    Falinski is having a laugh of us.

  2. Display NameMEMBER

    New sort of migrants. Don’t need shelter, work for peanuts, no requirement for water, health care or other services and don’t have any rights. Whats not to like?

        • happy valleyMEMBER

          Fingers crossed – then large numbers of the arrogant LNP can experience the depths of despair in opposition – many, if not all, will not cope well and some would leave politics.

  3. These arrogant c0cks think we’re stupid and will fall for their “These are not the droids you are looking for” bullshido. Some do, but the vast majority of Australians see this clearly as the stinking pile of ordure that it is. Nobody wants mass immigration reintroduced except Anus Bollox and his shiny suited mates at the big end of town.

    Oh…and I hope Gerry Harvey dies of Covid.

  4. TailorTrashMEMBER

    Falinski is the member for Warringa……..plenty of scope for shoebox building there ……those northern beaches
    need to good dose of diversity and vibrancy ……plenty of developer dollars for him to harvest

  5. Failsinski own “argument” 😜 doesn’t even make sense, even if you ignore the satire eg “special interest lobbying”. In one breath he claims prices rose (over 20%) due to a lack of supply even though the prime, if not only, additional demand vanished at that very time he claims there is a shortage thus he defeats his own argument! Does Failsinski really think people will buy this lie? But he’s right, house prices do not depend on immigrants when you juice the market with poor policies of all sorts.

    And if there has been such a massive shortage of houses (42,000) built over years & years there should be about 100,000 homeless people added each year, literally millions homeless by now.

  6. Absolute BeachMEMBER

    I am furious after reading that garbage. On the warpath type angry. I think all the comments agree. What does he think he is going to achieve by writing what is clearly propaganda and divorced from truth?

  7. Sadly, he’s probably technically correct in the sense that usable housing supply is drip-fed independent and regardless of immigration levels and population growth to ensure prices are held high.

    • Even StevenMEMBER

      +1.

      That’s plausible. But anyway you look at it, high immigration is likely to make the problem worse.

      • Yes, but there’s no guarantee lower immigration (in itself) will make the situation any better. The obvious example being the last 18 months.

        • “Yes, but there’s no guarantee lower immigration (in itself) will make the situation any better. The obvious example being the last 18 months.”
          Indeed. If you go back to many of LVOs early articles post GFC on this website, there’s a lot to support your position. Both supply and demand (beyond immigration) is distorted by multiple policy settings. Made worse in recent years due to the rise of Airbnb, QE etc

    • The levers that government has to achieve this will only work over the short term in the absence of high population growth, unless it can confiscate and destroy existing housing. Other factors at play, such as rigid urban planning laws as well as tinkering with interest rates and lending criteria, include the return of hundreds of thousands of expatriates over the past two years and that the fact that the government has been furiously signaling a return to high mass migration as soon as possible. Just compare the changes in house prices in Europe over the past 10 years.

      https://www.globalpropertyguide.com/Europe/price-change-10-years

  8. Sooooo…..
    If Jase really thinks that supply is the problem why the fack aren’t the feds linking it to the immigration program?
    Only let people in if there’s enough affordable homes available for the people that are already here.

  9. Had anyone explained the concept of loan servicing to Falinski (I won’t use his first name)? And in particular what happens when you lower teh rates (let alone when you forcibly limit discretionary spending).

    That is, if the LNP are SO happy with interest rates being lower under them, and they have away billions income supplements over the last two years, the 20% increase is almost entirely due to his party.