According to the most recent Australian Bureau of Statistics (ABS) population figures, NSW experienced the largest intake of net overseas migrants in the country’s history, with an unprecedented 153,400 net migrants arriving in the state in the year to March 2023:
At the same time as NSW’s population is surging via record immigration, actual dwelling construction rates have collapsed, as illustrated in the next chart:
The result has been a collapse in rental vacancy rates and strong rental growth across Sydney, led by units:
Source: CoreLogic
Under the National Housing Accord agreed to by all governments at National Cabinet last month, 76,000 new homes need to be built in NSW annually for five consecutive years to meet the federal government’s target of 378,000 new homes.
That number is twice as many as the state is forecast to deliver, and more than has ever been been built in the state (see second chart above).
One can only wonder how such a supply target is possible in a era of high interest rates, structurally higher materials costs, labour shortages, and NSW suffering the highest number of construction company failures?
To make matters worse, large numbers of tradies are looking to move interstate from NSW, which will further stifle supply:
“An alarming new survey from online trade marketplace hipages has revealed 65 per cent of NSW tradies working in the home building space had considered moving interstate or to a new city, due to growing pressure on their business viability”.
“The snapshot of 500 business owners and leaders revealed the main concerns to be the increasing cost of materials (40% of respondents), the cost of living crisis (34%), increasing business costs such as petrol and insurance (31%) and a reduction in demand for their services (31%)”.
“Sydney bricklayer Ross Pirillo… has thought about moving to Queensland for greater access to work”.
“A lot more work’s going on in Queensland and I think the cost of living would be less. If I didn’t have family here, I’d probably be there already”.
Meanwhile, Katie Stevenson, NSW executive director of the Property Council of Australia, claims NSW “needs a lot more homes than we’re building now. We need almost double to be delivered each year to keep up with our projected growth”.
Clearly, NSW (and Australia more generally) has zero chance of keeping up with the federal government’s extreme immigration program.
Instead of lobbying for more immigration, Premier Chris Minns should be demanding that the Albanese Government slash the intake.
Otherwise, the state’s housing crisis will continue to worsen.
