Will reducing migration solve Australia’s housing crisis? Experts weigh in

Tyler Mitchell By Tyler Mitchell Jun21,2024
Key Points
  • More than 50 per cent of Australian households are occupied by one or two persons.
  • Even if the government reaches its 1.2 million housing target, Australia could still face a housing shortage, report reveals.
  • Australia needs skilled migrants for construction industry to build the houses needed to curb the crisis, expert says.
In May, Opposition leader Peter Dutton proposed as a measure to address the nation’s housing crisis.
This solution arises from the belief that housing numbers are not increasing at the same rate as the number of people arriving in Australia.
According to this reasoning, reducing migration along with the over the course of five years could solve the crisis.

However, some experts say it is not this simple.

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Dr Michael Fotheringham Credit: Supplied

Dr Michael Fotheringham, managing director at the Australian Housing and Urban Research Institute, said blaming migrants for the ongoing housing crisis was a “too simplistic approach for a complex problem”.

We are consuming more houses for the number of people we have. That is a bigger driver for shortfall in housing than migration.

Dr Michael Fotheringham, Director, Australian Housing and Urban Research Institute

“The number of people per household is decreasing. Australia is increasingly becoming a nation of single-person or two-person residences, with more than half of households consisting of just one or two people,” he told SBS Punjabi.
“Of course, the more people we have feeds into the imbalance but it’s a lot more complex than that,” he said.
According to Fotheringham, the way Australia uses its houses has changed. Despite the shift from traditional multi-generational housing to nuclear families, the average number of people per household has decreased.
However, he said the size of houses in Australia has not decreased, leading to a trend of “under-utilisation”.
“If the trend continues, Australia could be short on houses for the existing population, let alone for migrants,” he suggested.
In a Sarah Hunter, assistant governor (economics) at Reserve Bank in Australia,shared that the average number of people living in each household has trended lower, from around 2.8 in the mid-1980s to around 2.5 percent currently.

“During the pandemic, there was a shift in preferences towards more physical living space per person, which is understandable when lockdowns forced us to spend more time at home. This was particularly the case for people who shared a home with non-family members, such as young people living in a flat share,” she said.

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‘Migrants and locals not competing for similar houses’

Fotheringham said the majority of migrants are temporary migrants, most of whom are students and rely on accommodation offered by universities or other rentals.
This is a different market to the private home ownership market, he said.
Adam Bindra, a real estate agent and director at Area Specialist, a real estate agency, also argued that migrants and existing Australians residents are not competing for similar houses.
“As soon as a migrant becomes permanent, most often they would look at buying a house as their first major investment, however, the type of houses migrants look for are ones which are closer to community,” he said.

“On the contrary, the Australian community prioritises location. They often go for houses which have better access to freeways, and are closer to beaches, schools and shopping complexes,” he said.

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Adam Bindra, real estate agent and director at Area Specialist. Credit: Supplied

Bindra said the housing policies adopted during COVID-19 have significantly affected the housing market, but for the worse.

“The stamp duty waiver, and other rebates prompted a lot of people to book land. The sudden rise in purchase led to inflation of prices,” he said.

Migrants needed for construction

Some experts say that instead of looking at migrants as house seekers, the Australian government needs to focus on migrants who could help build houses.
“Australia could use targeted skilled migration in construction and allied fields to fulfil the over the course of five years,” Fotheringham said.
He added that the higher cost of materials, workforce shortage and unavailability of trade workers, among other factors, might make this target harder to achieve.
According to a new report commissioned by non-profit Settlement Services International (SSI), Australia is underutilising the skilled migrants already living in the country.
The 620,000 migrant workers already in the country do not have the opportunity to fully use their skills, the report said.

Despite typically having higher qualification levels than their Australian-born counterparts, almost half (44 per cent) of migrants and refugees in Australia are working in roles below their skill level.


According to the report, $70 billion could be added to the economy over the next 10 years if permanent migrants worked in jobs that matched their skills at the same rate as Australian-born workers.

“The results also indicate a growth in the output of the dwellings sector – that is, housing supply increases because of a more productive and better resourced construction industry,” the report said.

‘Opening up existing homes can boost economy, solve housing crisis’

Fotheringham called for a “holistic approach” to deal with the housing issue, suggesting Australians open up their empty rooms for people to rent.
A joint report by CoreLogic, Archistar and Blackfort suggested the building of ‘granny flats’ to ease off both the availability and affordability aspects of the ongoing housing crisis.
A granny flat is a self-contained one or two bedroom houses of at least 60 square metres internally.
The report claims there is capacity across Australia’s three largest capital cities to introduce 655,792 self-contained two-bedroom units as an addition to existing dwellings, providing an immediate opportunity to address the severe shortage of housing in these cities.

Analysis from CoreLogic shows an extra two bedrooms and additional bathroom could add around 32 per cent to the value of an existing dwelling. It added that a two-bedroom self-contained apartment could add an additional 22 per cent in rent each week, contributing more than one percentage point to the overall gross yield of the property.

Housing crisis is here to stay: Report

The report revealed that even if Australia meets its target of having 1.2 million housing over the next five years, it would still be staring at a housing crisis.
“The market is projected to supply 1,040,000 dwellings after deducting demolitions. New demand is projected to total 1,079,000 households.
“This represents a total shortfall of new market supply relative to new demand of around 39,000 dwellings over the six-year period. These shortfalls in new supply relative to new demand will add to the already significant under-supply of housing in the system.
“As a result, housing affordability is expected to deteriorate further over the forecast horizon,” the .
Listen to the interviews by clicking on the audio icon inside the picture at the top. 
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Tyler Mitchell

By Tyler Mitchell

Tyler is a renowned journalist with years of experience covering a wide range of topics including politics, entertainment, and technology. His insightful analysis and compelling storytelling have made him a trusted source for breaking news and expert commentary.

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