New migration rule will open the floodgates to even more people in Australia – and could make it harder for young Aussies to buy a house
Young Australians could soon face even stiffer competition to buy a house or an apartment under new rules making it easier and faster for corporations to recruit skilled migrants on six-figure salaries.
A record 454,400 migrants moved to Australia, on a net basis, in the year to March, despite the nation having a severe housing shortage.
That means Australia would need at least 181,760 new homes for the influx of skilled migrants and international students to be housed, based on the average household having 2.5 people.
Despite a rental and housing affordability crisis, the federal government is showing no signs of wanting to slow down Australia’s rapid pace of population growth, which is on track to hit levels unseen since the post-war 1950s.
Home Affairs Minister Clare O’Neil wants to streamline the process of businesses recruiting staff from overseas to fill skills shortages, with unemployment still low at 3.7 per cent.
Labor’s migration review is seriously considering changes so skilled visas are processed within weeks rather than months.
Young Australians could soon face even stiffer competition to buy a house or an apartment under new rules making it easier and faster for corporations to recruit skilled migrants on six-figure salaries (pictured is a Sydney auction)
They could also be able to recruit highly skilled migrants on salaries of $120,000 or more, businesses consulted on potential changes told The Australian Financial Review.
The minister’s office has declined to comment, with a final Migration Strategy expected to be released in late 2023.
Australians on an average, full-time salary of $95,581 are already unable to even buy a median-priced Sydney apartment, worth $822,145 because banks are unable to lend someone more than six times their salary.
Sydney’s mid-point house price is so dear at $1,359,936 that it’s unattainable unless someone with a hefty 20 per cent deposit of $271,987 – borrowing almost $1.1million – earns more than $180,000 a year to be among the top four per cent of income earners.
The situation is now so bad AMP chief economist Shane Oliver is calling on the federal government to halve net overseas immigration to 200,000 a year – down from levels above 400,000 now – so housing supply can keep up with population growth.
‘Current immigration levels are running well in excess of the ability of the housing industry to supply enough homes exacerbating an acute housing shortage and poor housing affordability,’ he said.
‘The role of high immigration levels can’t be ignored.
‘For years now there has been much discussion about poor housing affordability in Australia but debate about how immigration contributes to this issue is often lacking.
‘For a country with abundant land, it’s ironic that housing affordability is so poor.’
Australia’s population growth pace of 2.2 per cent is already among the highest in the developed world, trailing only Canada and Singapore.
But Dr Oliver said Australia’s net overseas migration level, covering permanent and long-term arrivals, was likely to climb above 500,000 and push the population growth rate up to 2.5 per cent.
‘This would take population growth to 2.5 per cent in 2022-23, its fastest since the 1950s,’ he said.
Dr Oliver said the building industry had been able to supply 200,000 new homes a year, on average, in the five years to 2022 and argued annual net overseas immigration should closely match that level.
A record 454,400 migrants moved to Australia, on a net basis, in the year to March, despite the nation having a severe housing shortage (pictured are Boxing Day crowds in Sydney’s Pitt Street Mall)
Despite a rental and housing affordability crisis, the federal government is showing no signs of wanting to slow down Australia’s rapid pace of population growth, which is on track to hit levels unseen since the post-war 1950s
He predicted that Australia’s housing shortfall could climb to 165,000 by the middle of 2024, but could surge even higher to 285,000 based on smaller household sizes since the pandemic.
The apartment building boom of the late 2010s had addressed a severe housing shortage but the reopening of Australia’s border to immigration in late 2021 has revived the housing crisis.
Sydney’s median house price is more than 13 times an average salary, whereas in the United States and the UK, ‘five’ is a more common debt-to-income ratio, a study by American housing think tank Demographia found.