Builders can’t meet Albo’s Big Australia housing needs

A new report from the National Housing Finance and Investment Corporation (NHFIC) notes that the cost of most building materials rose by between 20% and 40% in the year to 30 June, with supply constraints accounting for at least 80% of the increased cost:

NHFIC head of research Hugh Hartigan believes supply pressures are easing, but Housing Industry Association chief economist Tim Reardon still expects a further 10-15% increase in building material costs this financial year:

Alongside skyrocketing structural timber prices, the cost of ­plywood, steel beams, terracotta tiles, and timber window frames and doors all jumped by at least 25 per cent in the 12 months, the report showed. Aluminium windows and doors and metal roofing and guttering prices were up 20 per cent…

Mr Hartigan said “the worst of this supply chain pressure is over, although we don’t know if the costs have peaked”…

Housing Industry Association chief economist Tim Reardon said… despite this evidence of easing pressures, building material costs would still rise by a further 10-15 per cent in this financial year, Mr Reardon said, as surging power costs would force higher the price of energy-intensive materials such as aluminium and glass.

Last month, Australian Bureau of Statistics building approvals data for July showed that the average new house costs more than $400,000 to build, or $80,000 higher than before the pandemic, thanks to the strongest construction price inflation in decades.

This cost escalation would, in turn, lower construction activity:

NHFIC’s Hugh Hartigan also tipped a slowing in housing construction rates at the same time as immigration ramps-up:

Hartigan said the rapid pace of interest rate hikes, high costs, and supply constraints meant there was “significant downside” to his forecasts for around 550,000 new dwellings over the three years to mid-2024.

Mr Hartigan said NHFIC’s State of the Nation report from earlier this year already projected a shortfall in new apartment supply over the coming few years as migration picked back up, and that this could be “exacerbated” by the faster than expected drop in building activity.

As noted last week, net overseas migration (NOM) hit its highest ever level in the March quarter, with a record 96,200 net migrants arriving:

Highest ever NOM in March quarter.

The Albanese Government used last month’s Jobs & Skills Summit as a trojan horse to ramp immigration to unprecedented levels via:

• Raising the permanent non-humanitarian migrant intake to a record high 195,000 a year;
• Turbo-charging temporary migration by:
  • Expanding work rights for international students via:
    • Uncapping the number of hours international students can work while studying for another year; and
    • Extending the length of post-study work visas by two years.
  • Committing to clear the ‘backlog’ of “nearly one million” visas awaiting approval.

The former Morrison Government’s uncapping of international student working hours already saw a huge lift in student visa applications from India and Nepal. And Labor’s maintenance of this policy, combined with its two-year extension to post study work visas, will only accelerate international student arrivals even more.

Labor advertisement on visa ‘backlog’.

Combining the 35.000 increase in the non-humanitarian permanent migrant intake to a record high 195,000, the moves around student visas, and clearing the visa ‘backlog’, Australia will inevitably see an unprecedented surge in NOM next year and beyond.

Where will the hundreds of thousands of extra new migrants live when there is already a chronic shortage of homes for the existing population? In tents? On the streets?

The only plausible outcome of Albo’s Big Australia immigration push is an even tighter rental market, soaring rents, and a rapid increase in homelessness – an inequality disaster in the making.

With friends like Anthony Albanese’s “Labor”, Australia’s working class sure doesn’t need enemies.