The true cause of Australia’s rental crisis


CBA economist Harry Ottley has published a chart pack that illustrates the dire consequences of record net overseas migration on Australia’s rental market.

Residential building approvals have collapsed across the major jurisdictions:

House commencements have also collapsed:

Apartment commencements have likewise collapsed:


The next chart summarises the situation at the national level, with approvals, commencements, and completions all collapsing:

Meanwhile, net overseas migration is running at record levels across the major jurisdictions and nationally:

Net overseas migration

This record net overseas migration has driven population growth through the roof:


The combination of record population growth and falling housing construction has pushed residential rental vacancy rates to rock-bottom levels:

Accordingly, rental growth has soared across the major capitals:

Advertised rents

The next chart plots asking rents across the major capitals:

Finally, the surge in immigration has driven the rebound in house prices, despite the Reserve Bank of Australia’s aggressive monetary tightening:


Bottom line: Australia’s historically high net overseas migration has driving a gaping gap between housing demand and supply, which is driving up both prices and rents.

Even immigration influencer, Abul Rizvi, agrees that the situation has gotten out of hand:


The data is irrefutable.

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.