In a recent interview on Sky News, Yellow Brick Road Home Loans Executive Chairman Mark Bouris delved into the heart of Australia’s housing crisis, pinpointing immigration policies as a pivotal factor. With a spotlight on the growing demand for housing, Mark Bouris posed a crucial question: “How are we going to bolster the supply of new dwellings to match the population surge resulting from these new immigration policies?”
Mark rightly highlighted the supply-demand equilibrium as a critical concern. Yet, the intricacies of this issue don’t just fall on the shoulders of a single governing body. As he eloquently stated, “Is it a federal government issue?Or does it rest with state or council levels?” Delving deeper, he uncovered the challenge faced by property developers in gaining approval for their plans. “Talk to any property developer, and they’ll echo the same sentiment: the biggest hurdle they encounter is the approval process.”
This approval process bottleneck significantly hampers the creation of new developments and dwellings. This limitation becomes even more pronounced when juxtaposed against a surge in immigration. As Mark aptly pointed out, “The sudden influx of immigrants further exacerbates the situation.” The ripple effect is felt across the spectrum – skyrocketing house prices, scarce rental options – all trace back to the underlying issue of supply.
So, who holds the reins of this supply chain? Mark unearths the answer, “Property developers are eager to cater to the market. The crux of the matter lies in the hands of the governments – local, state, and to some extent, federal.” This collaboration becomes crucial to balancing demand with supply.
A glimpse at the data sheds light on Australia’s construction efforts. With one of the highest rates of housing construction in the developed world, and a noteworthy number of construction workers per capita, the question arises: Why is there a growing housing shortage? The answer lies in a pivotal factor – immigration. Australia’s decision to scale up immigration to unprecedented levels has been a driving force behind this phenomenon.
Net overseas migration statistics paint a revealing picture. The average net overseas migration surged from 90,500 (1991-2004) to 219,000 (2005-2019), constituting a significant annual increase. The projection for the next 40 years underlined a 50% population growth, primarily powered by net overseas migration.
The 2023 federal budget set an even higher projection of net overseas migration – reaching a record high of 400,000 in 2022-23, 315,000 in 2023-24, and 260,000 from 2024-25. This adjustment surpasses the earlier projection. Consequently,Australia’s population surge is now anticipated to outpace the 2021 projection.
The inevitable outcome of this imbalance is a persistent housing shortage. Housing demand, fuelled by immigration, continuously outpaces supply.It’s time we addressed the elephant in the room – extreme immigration levels, not purported construction decreases, are steering Australia’s housing shortfall.
The optimal solution begins with recalibrating net overseas migration. Aligning it with the nation’s capacity to provide new housing, infrastructure, and services is the need of the hour. A targeted approach, akin to historical norms of around 100,000 people per year, should be our compass.
Let’s embark on a path where thoughtful policies harmonise housing supply and demand, ensuring a thriving, balanced future for Australia.
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