Record immigration behind rental crises


Every honest analyst knows that the record surge in Australia’s net overseas migration is behind Australia’s current rental crisis:

Australian NOM

The 518,000 net overseas migrants that landed in Australia over 2022-23 has driven Australia’s rental vacancy rate to all-time lows:

Rental vacancy rate

Source: CoreLogic


In turn, Australia’s rental inflation has soared:

Rent inflation

And the rental situation is likely to deteriorate further in 2024 as historically high population growth meets falling housing construction:

Housing supply and demand

Exactly the same is playing out in Canada according to a speech delivered last week by Bank of Canada Deputy Governor Toni Gravelle, which focused on the impact that record levels of immigration is having on inflation, especially its contributions to the housing crisis.

Canadian immigration

“Shortly after immigration began ramping up in 2015, Canada’s vacancy rate—a measure of how many apartments and houses there are available to rent or buy—started to fall. The construction of new housing was not keeping pace with population growth”, Gravelle noted.


“Then, when newcomer arrivals picked up sharply in early 2022, that steady decline in the vacancy rate became a cliff. Canada’s vacancy rate has now reached a historical low”:

Canada rental vacancy rate

“The housing imbalance also has serious consequences for shelter price inflation, which accounts for about 25% of the CPI basket. Shelter price inflation rose to 6.1% in October and contributed 1.8 percentage points to that month’s total inflation reading of 3.1%”, Gravelle said.

“If we look more closely at the data, we see rent inflation accelerated to 8.2% in October, a 40-year high, up from 7.3% in September and 4.7% a year ago”.


“Canada’s housing supply has not kept pace with recent increases in immigration”.

“When we look at the five years leading up to the COVID-19 pandemic, the need for new housing grew somewhat faster than new construction”.

“Then, in the last year or so, demographic demand soared above the pace of new housing starts”:

“Population growth has added to the pressure on shelter price inflation… We could continue to see upward pressure on the components of inflation related to rent and house prices”, Gravelle warned.

Canada now has homeless encampments littered throughout its cities:


Who would have thought: ramping immigration to record levels, well beyond the nation’s ability to supply homes, would drive up rents and force people into homelessness.

The same forces are playing out in Australia under Mad Albo’s unprecedented immigration.

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.