Danica De Giorgio of Sky News interviewed me on Friday night about Australia’s rental crisis and why it can only get worse.
Below are key highlights.
Danica De Giorgio:
No one ever voted for a Big Australia. And yet here we are paying the price for it. Australia’s migration intake hit record numbers in January, despite the Albanese government’s plan to slow the surge of new arrivals.
Leith, how did we get here?
Leith van Onselen:
We had 55,000 net arrivals in January, which is the highest January in history. It also compares to 21,000 in January last year, when obviously we had record immigration.
When you pair this with the latest national accounts, which estimate that Australia’s population grew by 680,000 last year, what it tells you is that migration is still picking up.
As you might remember, the Albanese government said that they would lower immigration this year.
They projected 375,000 net overseas migration this financial year. But it looks like we’re going to smash that out of the park because all the data we’ve received up to yesterday says that migration is still rising.
Danica De Giorgio:
We’ve got a situation where the rental market’s tight. People are being squeezed out of the housing market. And the reality is that in terms of construction of new dwellings, they can’t keep up with this current demand.
Leith van Onselen:
It’s an absolute shocker. The Australian Bureau of Statistics released data to Q4 2023 this week. It showed net dwelling additions – so construction minus demolitions.
What it showed is that we only added 166,000 homes nationally last calendar year. And that’s against a population increase of 680,000.
What that means is we only added one dwelling for 4.5 new residents. And that is the reason why the rental vacancy rate has collapsed to an all-time low.
Source: Domain
It’s why rents are going through the roof and people have been forced to live on the streets, in tents. It’s why people have been forced to live in group housing and in severe rental stress.
The blame for this rental crisis is pinned firmly on the federal government, who has basically decided to open the floodgates and import more people into Australia than we can build houses or infrastructure for.
And that’s really the question that every Australian should be asking to the Albanese government.
Why did they adopt this poor policy?
Danica De Giorgio:
Today we found out that the rental vacancy rate has fallen to a fresh low in February. How long do you expect this trend to continue for?
Leith van Onselen:
February was a record low for the vacancy rate. And I think it’s going to get worse because, obviously, we’ve got this very strong population growth through immigration.
At the same time, supply is actually falling. So, the construction industry is completely bottlenecked.
We’ve got high labour costs, high interest rates, and we’ve also got builders now competing for workers against infrastructure projects from the state governments.
So what this means is that we are going to have less housing construction going forward at the same time as we’re running this manic population growth.
This spells bad news for renters. It means further strong rental increases, really tight vacancies, people being forced to live in group housing, becoming homeless, and more severe financial strain for renters.
