Immigration gaslighting intensifies

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Last week, we witnessed perennial mass immigration shill, Peter Martin, try to argue that the record influx of migrants was not a significant driver of Australia’s current rental crisis.

Instead, Martin pinned the blame on the decline in household size over the pandemic “from a bit above 2.6 residents per household to a bit below 2.55 — but applied to millions of households it meant about 140,000 more houses and apartments were needed than would have been”:

Average household size

Over the weekend, The Guardian published an article arguing that the only solution to Australia’s housing crisis is to overcome NIMBYism and bulldoze Australia’s suburbs into “medium – and high-density development”:

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“There is broad agreement that significantly increasing medium-density housing in existing suburbs that are well served by public infrastructure is crucial”, the article says.

“Yet despite planners’ calls over decades for more townhouses and low-rise apartment blocks in the so-called “missing middle ring”, a common pattern has emerged across Australian cities: fierce opposition to new development from local residents”.

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The Guardian tries to argue that record immigration is a solution to Australia’s housing shortage as it provides migrant workers to build houses for migrants.

“87% of migrants live in capital cities according to the Bureau of Statistics – experts say this will not necessarily fuel the rental crisis”, the article says.

“The managing director of the Australian Housing and Urban Research Institute, Michael Fotheringham, says increases in net migration could actually help, by supplying more workers for the housing industry”.

“If we want to build our way out of this problem, which we need to do, we need to address workforce shortages in residential construction, and migration is one of the faster ways to do that”, Fotheringham said.

“It’s futile to blame migrants for our housing market. They are also part of the solution”.

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Of all nonsensical arguments pertaining to Australia’s housing shortage, this has to be the most ridiculous.

Record net overseas migration of nearly 400,000 saw Australia’s population expand by a record high 482,000 in 2022:

Australian population change
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That’s roughly 185,000 new homes (net of demolitions) that are required just to meet the growing population (assuming 2.6 people per household).

That volume of construction needs land, it needs materials, and it needs construction workers, all of which are in short supply.

Extreme levels of immigration is the problem, not the solution.

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Instead of bulldozing Australia’s suburbs into higher density, chewing up green space and creating heat islands, why not simply reduce immigration back to historical averages of below 100,000 people a year:

This would ensure that household formation and demand remain in balance with supply, while also taking the strain off infrastructure and the environment.

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Australians also categorically do not support mass immigration:

Desired level of immigration

Why? Because they know that it means permanent housing and infrastructure shortages, a degraded environment, and a lower quality of life.

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Because that’s what they experienced in the 15 years leading up to COVID.

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.