Australia’s rental market is running hot. Slowing migration to take the temperature down, while housing supply catches up, is a smart move. But only if we do it the right way.
Net overseas migration rose to a record high of 454,000 in the year to March and is likely to be more than 500,000 by the end of the year. Migration was always going to surge once Australia’s borders reopened, but it’s run far stronger than anyone imagined.
Immigration numbers have surged since the pandemic, but merely turning off the switch will create more problems.Credit: Wayne Taylor
Every 100,000 extra migrants that we didn’t expect raises rents by about 1 per cent. Those higher rents benefit property owners – and boost national income – but they hurt vulnerable Australians already struggling to pay the rent.
National cabinet’s plan to boost housing supply remains the best way to make housing cheaper in the long term. But building houses takes time, so it won’t solve the immediate rental crisis.
Slowing migration would help vulnerable Australians whose rents are rising today. But if done badly, it would make us all poorer.
Most notably, lowering Australia’s skilled migration intake would be a costly mistake.
Australia is offering 137,100 permanent skilled places this year. Grattan Institute modelling shows that reducing the permanent skilled program by 10,000 places each year could cost the federal and state budgets between $68 billion to $125 billion over the next 30 years. And since most permanent skilled visas go to migrants already in Australia, it would have little impact on migration numbers or rental demand in the short term.
Reducing the number of permanent family visas on offer – 52,500 this year – would also do little to reduce housing demand because applicants would simply remain in Australia for longer on temporary visas while waiting for their permanent visa.
Immigration is smashing renters. It’s time to hike fees for international students
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27.11.2023
Australia’s rental market is running hot. Slowing migration to take the temperature down, while housing supply catches up, is a smart move. But only if we do it the right way.
Net overseas migration rose to a record high of 454,000 in the year to March and is likely to be more than 500,000 by the end of the year. Migration was always going to surge once Australia’s borders reopened, but it’s run far stronger than anyone imagined.
Immigration numbers have surged since the........
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