A leading economist has called for to reduce the number of immigrants coming in to ease the ‘spectacular failure of housing supply to meet demand’.
Chris Richardson, who has worked for the n Treasury and the International Monetary Fund, said ‘housing affordability is the worst it’s ever been’ and capping immigration ‘for a time’ may be the best way to ease the crisis.
He said ‘s record-high migration under the Labor government – 500,000 people in the 12 months to September – was heaping pressure on already strained real estate and rental markets.
In a column for the n Financial Review, Mr Richardson wrote that while migration was adding to the problem, the root cause was the fact ‘our overly regulated and high-cost [housing] supply side has spectacularly failed demand’.
‘Although a strong migration intake can make great sense, ‘s mounting failures on all the other policies that need to accompany that mean we’re in a hole,’ he wrote.
Top economist Chris Richardson has called for to reduce the number of immigrants coming in to ease the ‘spectacular failure of housing supply to meet demand’
Immigration soared to 500,000 people in the last 12 months under the Albanese government
Mr Richardson explained the main bottleneck to housing supply was that every housing development – from a single house, to a subdivision, to a block of units – must be approved by local councils.
‘The decades of dumb we’ve chalked up in housing have been as simple as local councils saying “no” to things to which they should have said “yes”,’ he wrote.
‘And, on the few occasions that councils do say “yes”, the attached conditions burden our construction sector with crippling costs.’
In New South Wales alone, state government data shows council development approval timeframes have blown out when housing supply is desperately needed.
It took councils on average 111 days to determine an application this financial year, compared to 83 days in 2021-22.
This is despite building plans submitted to NSW councils dropping 20 per cent over the same period from 81,158 to 64,980.
Sydney and Melbourne will need to build at least another 1.3 million homes over the next 18 years to accommodate an extra three million residents, according to a report last month by The Sydney Morning Herald.
Building approval periods in NSW have ballooned despite the desperate need for housing
MacroBusiness chief economist Leith van Onselen said: ‘The highest immigration in a single year under the previous government was 260,000 – so population growth is off the charts.’
‘This is happening at the same time new dwellings constructions are collapsing – last financial year only added 170,000 homes,’ he told Sky News.
‘In the year to September this year, we only approved 164,000 homes.
‘The Albanese government is ramping up immigration to levels we’ve never seen before, so we’re going to have an even deeper housing crisis.’
‘The federal treasury loves it because they collect most of the tax revenue it brings in – but the costs like infrastructure, health and education fall on the states.’
Economist Dr Leonora Risse, from RMIT, said ‘migration intake needs to be accompanied by an appropriate set of well-designed and supportive policies.
‘This involves providing adequate infrastructure and services as our population grows, as well as ensuring fair and inclusive economic opportunities for new migrants, in relation to education, employment, access to business opportunities and other essential services such as safe and affordable housing.’