It’s official: Housing supply won’t keep pace with mass immigration

Last year’s NSW Budget revealed that the state’s housing shortage had all but disappeared thanks to the collapse in immigration:

Building approvals are now running well ahead of the change in population, which is depressed due to the lack of inward migration. This suggests a potential oversupply in the near-term relative to the underlying demand for housing (Chart 2.13).

However, the NSW Intergenerational Report warned that housing shortages would reemerge once the ‘Big Australia’ mass immigration policy resumes. Specifically, the IGR stated that “net overseas migration is expected to return to positive levels in 2023, before returning to pre-COVID-19 levels towards the end of this decade”. Accordingly, “net migration is projected to contribute 2.0 million people to the NSW population” over the projection period to 2061, which “will need 1.7 million additional homes for a growing population, equivalent to one new home for every two existing homes”.

Yesterday, The SMH reported that NSW housing supply will fall way short of population growth, with all but one Sydney council set to miss their housing targets:

Just nine Sydney council areas are expected to build more homes in the next five years than they did in the past five – and only one by a significant number – underscoring the stubborn supply drought contributing to the city’s housing affordability crisis…

Data from the state government’s Urban Development Program shows 181,000 new dwellings were built in Greater Sydney over the past five years, led by Parramatta (18,016), Blacktown (17, 761) and the City of Sydney (15,384).

The government’s medium-growth scenario forecasts 151,000 new homes will be built in the next five years, well below the 50,000 a year required to meet demand – let alone address the long-term deficit of 100,000 homes identified by treasury in 2016…

Let’s get back to basics here. Sydney’s, and indeed Australia’s, ‘housing shortage’ could be permanently solved with the stroke of a pen by the federal government. All it needs to do is reduce immigration back to historical pre-2005 levels. This would also negate the need to bulldoze our suburbs into high density.

Any housing shortage problem is really an excessive immigration problem.