Billionaire property developers, Harry Triguboff and Tim Gurner, were interviewed by The Australian where they predicted an “almighty rental crisis” driven by the rapid rebound of migrants and international students.
“You’ve got a situation where there’s no supply and immigrants are coming back, international students and the Chinese are returning, and so we’re going to have an almighty rental crisis”, Gurner said.
“At some point in the next six months to 18 months you’re going to have an almighty boom. The government is going to have to do something to loosen up lending. So [the market] should stabilise and then take off”.
Sounds like a dream come true for property developers, doesn’t it? No wonder they love ‘Big Australia’ immigration so much.
Recall that Australia’s population grew by a record high 482,000 in 2022, driven by net overseas migration (NOM) of nearly 400,000 (also a record):
This population explosion has halved the capital city rental vacancy rate, driving rents to rise at a double digit pace:
The early indications are that net overseas migration will surge even higher in 2023, given net temporary visa arrivals (excluding visitors) are booming on the back of record international student flows:
The Albanese Government has deliberately engineered this immigration boom (and rental shortage) by:
- Increasing the permanent (non-humanitarian) migrant intake to a record high 195,000 people a year (up 35,000);
- Increasing the number of hours international students can work and how long they can stay after they finish their studies: and
- Committing 500 new staff and committing $42 million of funding to clear ‘visa backlogs’.
The ultimate result will be a further tightening of the rental market as demand far outpaces supply, and the “almighty rental crisis” warned of by Gurner.
Lower-income Australians will be put under further financial strain and homelessness will increase, while property moguls like Gurner and Triguboff laugh all the way to the bank.
It is an inequality disaster in the making.
Finally, anybody that thinks ‘we just need to build more’ should study the below quote from Gurner:
“We’re very fortunate to have a large pipeline … and we’ve got 10-11 apartment projects fully permitted and ready to go when market conditions are there for us”.
Translation: we will continue to choke supply in order to maximise our profits.
Such is the economic conflict of property markets.
