Proof Australia’s housing shortage is not a “supply issue”

Housing Minister Clare O’Neil delivered a speech to the National Press Club last week in which she waxed lyrical about how Australia’s housing shortage is fundamentally a supply issue.

Below are some highlights of Clare O’Neil’s claims:

“The way to ensure Australians can afford a place is to build enough houses for everyone. Since the turn of the century, we’ve been building nearly half as many homes per person as we did in the decades after World War II. Not because population growth is higher, but because home building has fallen so dramatically”…

“Our government is unapologetically pro- supply. If we want housing to be more affordable for Australians, we need to build, build, build”…

“We are a firmly pro-supply government because we see that the answer ultimately to affordability in our country is we got to build more housing. Build more housing, build it more quickly”…

The irony is that under the Albanese government, actual dwelling construction remains low compared to the last decade’s peak:

Even so, the rate of construction – 172,700 in 2025 – is higher than the construction rates recorded between the mid-1980s and 2010.

The difference, of course, is that net overseas migration (NOM) was more than doubled in the mid-2000s, meaning that Australia required significantly more homes to be built to keep pace with stronger population growth.

And NOM has never been higher than under the Albanese government, which has seen more than 1,100 net migrants land per day during its time in office:

Yet, Clare O’Neil didn’t bother mentioning the word “migration” in her hour-long National Press Club Address. It was all “supply, supply, supply”.

The following chart from Alex Joiner at IFM Investors illustrates why Australia’s housing shortage is in fact a “demand issue”:

Australia’s population would be 3 million smaller had the federal government not more than doubled NOM and the pre-2005 population growth trend held.

That’s 3 million fewer people that would require housing.

Hilariously, back in February 2023 as Home Affairs Minister, Clare O’Neil acknowledged that Australia’s migration program had not been working in the best interests of Australians:

This “uncapped, unplanned” migration program was “the source of huge problems” and had “enormous economic and social consequences”.

“In 2007 we had about 1 million temporary migrants in Australia, excluding visitor and transit visas. Today that number is 1.9 million. This rather staggering shift in direction has happened without any real policy debate or discussion. It happened not through thoughtful planning and strategy, but by negligence and continental drift”, then-Minister O’Neil said.

That was more than three years ago and Labor has presided over the largest migration boom in the nation’s history, led by an explosion in temporary visas, which are 700,000 higher today than O’Neil lamented in January 2023:

Despite Australia’s worsening housing shortage, Labor has budgeted for 1.22 million new net migrants before the end of the decade:

Clearly, Australia’s housing shortage is a “demand issue”, driven by extreme levels of immigration.