Australia would struggle to house more than 74,000 new foreign migrants based on building approvals falling to the level lowest in more than a decade – and failing to keep pace with rapid population growth.
A campaigner against excessive immigration has warned this will force more younger people to live with their parents for longer because of the housing shortage.
This is occurring as more building companies go into receivership, which could lead to more homelessness as the supply of new housing lags behind demand.
In the year to February, 162,751 new homes were approved by the likes of local councils, with this figure covering the total number of private houses and units, new Australian Bureau of Statistics data released on Thursday showed.
But with 481,620 migrants moving to Australia in the year to January, on a net basis, that would leave 74,742 migrants struggling to find somewhere to live as international students compete for rental accommodation.
Australia would struggle to house more than 74,000 new foreign migrants based on building approvals failing to keep pace with rapid population growth (pictured is a Bondi rent queue)
That’s based on the average household size of 2.5 people from the last Census in 2021.
Australia’s latest annual building approvals figure is even weaker than the completed homes tally of 170,215 in the year to September.
Both building approvals and building activity levels are significantly below Labor’s annual target of 240,000 over five years.
Migration Watch Australia founder Jordan Knight, 29, said record-high immigration last year meant many young people were unable to move out of home, with the rental vacancy rate at just one per cent.
‘It’s simple mathematics: if you add too many people into a really constricted housing market, you’re going to have a lot of pain for a lot of people and you’re going to push prices sky high,’ he told Daily Mail Australia.
‘Not only are you going to force higher house prices due to excess demand, but you’re going to force people into worse living situations.
‘It’s going to mean that people will stay living with their parents for longer, it will mean people will be share housing for longer, it will mean that people will be living five to a room.’
In an alarming development, building approvals of private units in February plunged by 25 per cent to a 12-year low, calling into question Prime Minister Anthony Albanese’s plan to build 1.2million homes over five years.
Commonwealth Bank senior economist Belinda Allen said weak building activity was causing Australia’s rental crisis.
‘Australia is not building enough homes,’ she said.
‘Capacity constraints and a rapid increase in costs are plaguing the residential construction industry.
Migration Watch Australia founder Jordan Knight, 29, said record-high immigration last year meant many young people were unable to move out of home, with the rental vacancy rate at just one per cent
‘We are seeing the impact flow through to prices for existing homes and the rental market.’
Just 3,771 units were approved in February, compared with 8,404 houses, or 12,520 new homes for the month when public housing was factored in.
Overall annual building approvals are at the weakest level since 2013, on one measure.
Mr Knight said it was naive to expect housing supply could be ramped up to cater to surging demand for housing arising from higher immigration.
‘It takes two to three years at the very best to build an apartment block – we’ve already got shortfalls in the hundreds of thousands now,’ he said.
‘This is going to get far worse before it gets better.
‘The best lever that governments can pull right now to ease the housing crisis is to pull the lever on immigration to ease demand.’
Higher building costs have also caused a surge in building companies going into receivership.
‘There’s already a massive shortfall,’ he said.
In the year to February, 162,751 new homes were approved, with this figure covering the total number of houses and units, new Australian Bureau of Statistics data released on Thursday showed (pictured are houses at Oran Park in Sydney’s south-west)
‘It looks like chaos is coming down the corner because it’s bad now, it’s going to get worse and with builders going bust, it’s going to mean that more people go homeless.’
A record 548,800 migrants, on a net basis, moved to Australia in the year to September.
The level slowed to 481,620 in January but this is still well above Treasury’s forecast of 375,000 for 2023-24 made in December’s Mid-Year Economic and Fiscal Outlook.
Australian building approvals fell by 1.9 per cent in February, following January’s 2.5 per cent decline.
This marked the third consecutive month of decline, with monthly building approvals 5.8 per cent lower compared with a year earlier.