Analysis from Carlos Cacho at investment group Jarden projects that Australia’s rental price inflation will accelerate beyond its current 15-year high of 7.8%, driven by historically high net overseas migration, historically low rental vacancy rates, and weak housing construction.
Cacho stated that there was an 18-month lag between asking rentals and ABS rental inflation, which measures the average of all rents.
He stated that advertised rents were growing at a rate of about 10% and were expected to remain at a high of 8.5% this year before slowing to 4.3% by 2025.
As a result, rental inflation in Australia will peak at 10% this year, a level not seen since the 2008 global financial crisis, and then remain at 8% through 2025, remaining high into 2026.
“This is likely to maintain upward pressure on inflation and will likely remain a challenge for the RBA as it seeks to bring inflation back to its 2 to 3% target”, Cacho said.
“Ultimately, we see the strong rise in rents, along with broader services inflation, as the main drivers of inflation over the next two years”.
Shadow Treasurer Angus Taylor told Sky News on Sunday morning that the Coalition’s proposed immigration cuts would help renters.
“If we’re going to have Australians being able to get into a home, to realise the great Australian dream of home ownership, then we’ve got to have a situation where we’ve got a housing supply balanced with immigration”, Taylor said.
“We’ve seen extraordinary numbers coming in. They are numbers that our housing supply simply can’t cope with”.
However, Greens leader Adam Bandt hit back, arguing that migrants should not be blamed for the rental crisis and that Australia just needs to build more homes.
“Well, my view on migration at the moment is this: Labor and Liberal are engaged in a migrant-bashing race to the bottom as a distraction from the real issues facing this country every time that there is a cost-of-living crisis”, Bandt said on ABC’s Insiders on Sunday.
“We can build enough homes for everyone to have an affordable place to live, OK. I’m not going to spend the next year in the lead-up to an election blaming migrants for a problem that they didn’t cause”.
Nobody is blaming migrants, Adam, but the government running an excessive immigration program.
Bandt’s comments follow those of Greens housing spokesman Max Chandler-Mather who told ABC Insiders host David Speers in February that the party supports higher immigration levels, noting that “more people coming to this country is a good thing.”
“We just don’t think that migration is a major cause of the housing crisis,” Chandler Mather claimed.
“We’d like to see a big increase in the number of refugees that this country is taking, but again, this is not the cause of the housing crisis”.
“In general, I think more people coming to this country is a good thing because we are desperately short of healthcare workers. We’re desperately short of construction workers. We’re desperately short of the people we need to make this country work,” Chandler Mather said.
In March, Chandler-Mather addressed the National Press Club, where he was directly asked about immigration’s impact on the housing market and environment.
Chandler-Mather howled xenophobia in response and refused to acknowledge any negative impact from excessive levels of immigration.
He also suggested that talking about moderating net overseas migration to a historically high 300,000 a year represents a “race to the bottom”.
Who can take the Greens seriously on housing with statements like these?
Rental data shows clearly that rents decreased during the start of the pandemic as net overseas migration fell, only to rocket when net migration soared to record levels:
The correlation between population growth and rents is as clear as day:
Migrant numbers have exploded in a supply-constrained market, which has pushed rental vacancy rates to historical lows:
As a result, rental inflation has soared, with worse to come as CPI rents catch up with asking rents:
The surge in population growth over the past 20 years, driven by historically high net overseas migration, has also contributed to the shortage of public housing:
Not only is the Greens’ undying support of high immigration throwing Australians into rental stress and onto the streets, but it also runs counter to the welfare of Australia’s natural environment.
The most recent State of the Environment Report explicitly cites population growth as one of the main threats to Australia’s environment:
The Greens market themselves as champions of the environment and the underprivileged. Thus, their rabid support of a giant Australia is pure policy bankruptcy.
“The Greens” are the epitome of false political advertising.
