A new report finds that Australia’s housing crisis cannot be solved without a major slowing of population growth. Australia is experiencing record population growth, with an extra 650,000 migrants this financial year and next, set to drive a 900,000 surge in total population. The report finds record population growth is creating a perfect housing storm, worsening existing flaws in the housing market caused by negative gearing, capital gains tax discount, first home buyer grants and underinvestment in social housing.
The report by Sustainable Population Australia (SPA) says the housing crisis risks a dystopian future of homelessness and rent stress for many Australians for years to come.
SPA national president Jenny Goldie says SPA prepared the report because population growth is being overlooked as a key part of the policy response to the housing crisis.
“The government turned on the immigration tap to full bore, and they could just as easily turn it down. This is an horrific social crisis, and the federal government should be held to account,” Ms Goldie says.
“According to the report, the insidious reframing of housing as a financial asset rather than a public necessity is shattering Australia’s social contract which promised dignity and security for all,” Ms Goldie adds.
“It is driving widening inequalities of wealth and personal autonomy. We have allowed these trends to intensify to the point where social cohesion is under severe strain.”
The report calls for a combination of tax reform, regulation, investment in public housing and a sustainable population policy, to address the housing crisis.
It says all of the Albanese government’s $10 billion proposed Housing Australia Future Fund should be used to build or buy social housing rather than the government’s plan to invest the money in financial markets and build only with the dividends. The report brands the government’s approach as ‘irrational and risky’.
But the report says that social housing on its own will not solve the housing crisis. It points to strong evidence that population growth is a key driver of housing demand.
“Thus, population growth must be slowed. A target for net overseas migration should be around 50,000 to 80,000 per year, similar to immigration levels experienced in the 1990s,” says Ms Goldie.
According to the report, “The connection between population growth – driven by high immigration – and high housing inflation is often ignored or denied in political circles but is accepted as an undeniable fact by almost everyone knowledgeable about the property industry.”
Ms Goldie says the government, through its own decisions about immigration, has massively accelerated population growth.
“But now this growth is creating huge housing distress, there is not a peep from anyone that maybe we should stop the population growth that is causing this. It is as if we have to ‘suck it up’ for some unspecified greater good,” Ms Goldie says.