NHFIC projects chronic housing shortage after immigration rebooted

The federal government’s National Housing Finance and Investment Corporation (NHFIC) today released its ‘State of the Nation’s Housing 2021–22’ research report, which projects a chronic housing shortage when immigration is rebooted to its extreme projected level of 235,000 people a year (my emphasis):

• On the back of record low interest rates combined with state and Federal government stimulus, new housing supply is expected to be stronger than we anticipated in our 2020 report and will likely remain strong by historical standards over the medium term, with more than 550,000 new dwellings (net of demolitions) expected to be constructed (184,000 per year) over the next three years.
• New net housing supply additions are expected to outpace new household formation by 115,300 in 2022, and 35,500 in 2023, as international border restrictions are relaxed and Net Overseas Migration (NOM) begins to recover.
• From 2022 to 2032 (cumulatively) new household formation is expected to be broadly in balance with net new supply, but this is largely driven by unusually low levels of household formation in 2022 and 2023 owing to COVID-19.
• Once NOM has fully recovered, new household formation is expected to exceed new housing supply beyond 2024 by 163,400 dwellings cumulatively, or 20,400 dwellings on average per year. 

As noted above, this shortfall will be caused by net overseas migration (NOM) surging to a projected 235,000 from 2024, as projected in the Intergenerational Report, which is tipped 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.

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:

The federal government should be honest and admit that the single best thing it can do to ‘solve’ Australia’s 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.

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.