By Michael Yardney October 1, 2024

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Why Migrants Are Not to Blame for the Housing Crisis, but a Population Fix Is Needed

Property Investment
Why Migrants Are Not to Blame for the Housing Crisis, but a Population Fix Is Needed

Key takeaways

Migrants are often blamed for adding pressure to already stretched housing markets, but they actually bolster the economy and contribute to our communities.

According to Simon Kuestenmacher, migration is not just about numbers, but also about the skills, energy, and economic activity that new arrivals bring to the country. Migrants help build homes, but the supply of new homes hasn't kept pace.

The core issue is a broken housing supply system that is unable to keep up with demand. The focus has been on high-end apartments and luxury developments rather than affordable housing that meets the needs of the broader population.

To address population growth issues, we need a comprehensive and strategic approach that integrates immigration, housing, and infrastructure policies. This approach requires substantial investment in regional infrastructure to make them attractive and viable alternatives for new migrants and local movers.

Lately, it seems like everyone’s pointing fingers at migrants for the mess we’re in with housing, but let’s be real—blaming newcomers is just an easy way out of facing the real issues.

It's easy to understand why: with headlines constantly highlighting record immigration numbers and skyrocketing house prices, it's tempting to make a connection.

However, this perspective is overly simplistic and misinformed.

The truth is, that migrants are not the ones driving up housing costs—our real issue lies in how we manage population growth and plan for the future.

In a recent article in The Australian, leading demographer Simon Kuestenmacher argues that Australia’s housing crisis is not a result of immigration but rather a systemic failure in our planning and infrastructure strategies.

Here’s what he had to say about why migrants aren't to blame and what we need to do to address the root causes of our housing challenges.

The misplaced blame on migrants

Kuestenmacher explains that migrants are often targeted in the housing debate, perceived as adding insurmountable pressure to already stretched housing markets, especially in major cities like Sydney and Melbourne.

In reality, he argues, migrants play a crucial role in bolstering the economy, filling vital skill shortages, and contributing to the social fabric of our communities.

According to Kuestenmacher, migration is not just about numbers; it's about the skills, energy, and economic activity that new arrivals bring to the country.

Migrants don't just occupy homes—they help build them too, through both direct construction roles and broader economic stimulation.

To put it into perspective, Australia's net overseas migration is forecasted to contribute an average of 235,000 people per year over the next decade.

While this seems substantial, the real issue isn't the number of people arriving but the lack of adequate housing to meet this predictable demand.

The supply of new homes hasn’t kept pace due to restrictive planning policies, prolonged approval times, and a lack of coordinated investment in infrastructure.

The core issue: a broken housing supply system

The crux of the problem is a housing supply system that is unable to keep up with demand according to Kuestenmacher.

Australia's housing stock has grown at an average of only 1.6% per year over the past decade, far below what's needed to accommodate the overall population growth.

As Kuestenmacher points out, this mismatch between supply and demand is at the heart of the housing affordability crisis, not the influx of migrants.

For example, Sydney's current housing shortfall is estimated at around 100,000 homes, a number that continues to grow as supply fails to catch up with demand.

It's not just about building more homes but about building the right type of homes in the right places.

The focus has been on high-end apartments and luxury developments rather than affordable housing that meets the needs of the broader population.

Infrastructure and urban planning failures

Our current infrastructure is struggling to cope with population growth, not because of the volume of people but because of poor planning and execution.

Australia's major cities are feeling the strain of congested roads, overstretched public transport, and underfunded schools and hospitals.

The lack of integrated urban planning that ties housing development with infrastructure investment is a significant factor contributing to the crisis.

Kuestenmacher notes that while immigration has been a cornerstone of Australia's growth strategy, the associated infrastructure and housing have not kept pace.

This isn't just a recent oversight but a long-standing issue, stemming from decades of underinvestment and piecemeal planning approaches that fail to consider the bigger picture.

A population fix: strategic planning, not scapegoating

To address these issues, we need a comprehensive and strategic approach to managing population growth.

This doesn't mean reducing immigration; rather, it means planning better for the growth that migration brings.

Kuestenmacher suggests that an effective population strategy would include better integration of immigration, housing, and infrastructure policies.

By aligning these areas, we can ensure that housing supply grows in tandem with demand and that our cities are equipped to handle increased populations without compromising quality of life.

One critical aspect of this strategy is decentralization—shifting growth away from the already overburdened major cities and into regional areas.

This approach requires substantial investment in regional infrastructure to make these areas attractive and viable alternatives for new migrants and local movers alike.

By spreading population growth more evenly across the country, we can alleviate the pressure on our biggest cities and create a more balanced national economy.

The path forward: real solutions over blame games

It’s time to move beyond the blame game and start focusing on real solutions says Kuestenmacher.

Migrants are not the cause of the housing crisis; they are part of the solution, bringing skills, innovation, and economic growth to our shores.

The real challenge lies in fixing a housing and infrastructure system that has lagged behind the needs of a growing population.

Australia needs a coordinated national approach to population management—one that looks beyond short-term fixes and towards sustainable, long-term solutions.

This includes ramping up the housing supply, cutting through the red tape that slows development, and ensuring that new builds are matched by investment in roads, schools, and public services.

As Kuestenmacher succinctly puts it, "The blame doesn’t lie with those who arrive; it lies with those who fail to prepare."

It’s up to us to fix the system—to plan, invest, and build for the future so that Australia remains a land of opportunity for all, new arrivals and long-term residents alike.

Let’s focus on the real issues and work towards a future where everyone has a fair shot at affordable, quality housing.

By addressing these systemic failures, we can turn the tide on the housing crisis, ensuring that our population growth becomes a source of strength rather than a point of contention.

It’s time to shift the conversation from blame to action—because a well-managed population is not a problem to be solved, but an opportunity to be embraced.

About Michael Yardney Michael is the founder of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media.