Housing

Some claim that Australia’s recent level of immigration has (along with natural population growth and a range of other economic factors) contributed to a widespread shortage of affordable housing, particularly in the major cities.A number of economists, such as Macquarie Bank analyst Rory Robertson, assert that high immigration and the propensity of new arrivals to cluster in the capital cities is exacerbating the nation’s housing affordability problem.According to Robertson, Federal Government policies that fuel demand for housing, such as the currently high levels of immigration, as well as capital gains tax discounts and subsidies to boost fertility, have had a greater impact on housing affordability than land release on urban fringes. However, the Productivity Commission does not accept “population pressures” as a major driver of strong increases in house prices, stating that “increased demand for better quality and better located dwellings, rather than for more dwellings, has been the primary driver”.

The Productivity Commission Inquiry Report No. 28 ‘First Home Ownership’ (2004) also stated, in relation to housing, that “Growth in immigration since the mid-1990s has been an important contributor to underlying demand, particularly in Sydney and Melbourne.” ^[30] The RBA in its submission to the same PC Report also stated “rapid growth in overseas visitors such as students may have boosted demand for rental housing”.However, in question in the report was the statistical coverage of resident population. The “ABS population growth figures omit certain household formation groups — namely, overseas students and business migrants who do not continuously stay for 12 months in Australia.” This statistical omission lead to the admission: “The Commission recognises that the ABS resident population estimates have limitations when used for assessing housing demand. Given the significant influx of foreigners coming to work or study in Australia in recent years, it seems highly likely that short-stay visitor movements may have added to the demand for housing. However, the Commission is unaware of any research that quantifies these effects.”

Although research to quantify these effects on housing may not exist, the data to use in research does.