Proof housing ‘supply’ is not the affordability problem

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The Australian Bureau of Statistics (ABS) released population data showing that Australia’s capital cities expanded by 2,516,103 people in the decade to 2021, led by the migrant epicentres of Melbourne (+806,791 people) and Sydney (+650,815 people):

Population of Australia's capital cities

Australian capital cities swell in size.

A ‘lack of housing supply’ is often blamed for Australia’s housing affordability woes. However, separate ABS dwelling approvals data shows that capital city approvals hit record levels last decade:

Dwelling approvals capital cities

An epic capital city housing construction boom.

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In the decade to June 2021, Australia’s capital cities averaged 149,000 dwelling approvals a year, a massive increase from the 106,000 average yearly approvals in the decade to June 2011.

Clearly, anybody still trying to claim that a ‘lack of supply’ is to blame for Australia’s housing affordability woes needs their heads read. Australia built more homes than ever.

Rather, it is excessive immigration-driven population growth that has caused any supply shortfall.

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Sadly, the Albanese Government has committed to Australia’s biggest temporary and permanent migrant intake in this nation’s history via:

  • Lifting Australia’s permanent non-humanitarian migrant intake by 35,000 to a record high 195,000;
  • Lifting temporary migration to record levels 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.

In turn, the Albanese Government will ensure that housing supply never keeps pace with runaway migrant demand.

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With friends like the Albanese Government, who needs enemies?

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.