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).

NSW housing supply

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.

Australia's net overseas migration

Any housing shortage problem is really an excessive immigration problem.

Unconventional Economist

Comments

  1. reusachtigeMEMBER

    This is farkn awesome news for all the good people I know who have done the right thing and invested in rental properties!!

  2. One is beside oneself in excitement, as Engineer Albanese gears up to pour 1.2m net migration into Australia over the next five years, the exhilaration of the big construction and congestion-busting and rising house prices forever.

    • Display NameMEMBER

      Great news for western Sydney. The boiled frog experiment can progress. Tens of square kilometres of far too big houses on far too small blocks with no green spaces. Unfit for human habitation but perfect place to keep the service personnel for cooler, livable eastern suburbs.

      • blindjusticeMEMBER

        Whats the average sq m? Are you sure its not just that blocks are too small?
        We need enough roof space for long term solar and water capture
        What do you consider the cut off for being too big?

  3. rob barrattMEMBER

    And, of course, the roads, hospitals, schools, water & sewage infrastructure etc to support this human tidal wave are being built as we speak. Why, even I noticed the tent cities being erected at the local hospital A & E departments to provide accommodation during the 3 week wait to see someone.

    Yes, it’s all going swimmingly. Anything, anything, As long as those house prices don’t go down (involuntary shiver)….

    I am however a littla confused when I look at our heroic ABC web site comparing political party policies:
    https://www.abc.net.au/news/2022-04-20/federal-election-liberal-labor-nationals-greens-policy-positions/100482298
    There’s a lovelty little tab you can click on for each of the important issues. But, they seem to have forgotten immigration (unless you’re a refugee). Not a tab to be seen anywhere. A bit like Industrial Relations I suppose. I mean, if someone mentioned that without a prior warning (some viewers blah blah), well, people could get upset…

  4. DingwallMEMBER

    Any housing shortage problem is really an excessive immigration problem

    The Liberal and Labor governments strategy for the last 20 years and the next 200+ years is plain to see. There is no “problem” in their eyes. The strategy is to always ensure supply shortages and pumped demand because they have let this become the major component of the economy.

    The actual problem is how to get rid of housing as the primary economic driver. A problem that no one wants to touch (because they are all invested in the “strategy”)

    • ErmingtonPlumbingMEMBER

      It’s our manifest destiny to have our population exceed that of the mother country.
      We haven’t really grown up as a nation until we do.

      What is the current population of the UK

      • DingwallMEMBER

        Not so much the population competition but more like maintaining our house prices beyond theirs.

    • WhatcouldgowrongMEMBER

      Might I suggest a favela? Perhaps we can knock something up out of containers? It’ll reflect the direction this country is going on, celebrate our vibrance and the contempt we have for those who aren’t sufficiently propertied.

  5. Meanwhile the rest of the media pretends we have no immigration at all, and this Supply problem is just due to people wanting more space and moving into their own homes.