More population misinformation
The merchants of fear were out to get their clicks again on the weekend, jumping on the inevitable post-pandemic surge in migration to crack a headline:
“Monthly long-term arrivals and departures data released by the ABS suggests that net overseas migration (NOM) has surged even higher, with around 500,000 net migrants expected to have arrived in Australia over the 2022-23 financial year.
This level of immigration will obliterate the May federal budget’s forecast of 400,000 net NOM for the 2022-23 financial year.
The immigration boom has arrived at the same time as actual dwelling construction has collapsed.
There were only 175,200 dwellings constructed in Australia in the year to March 2023 against a total population increase of 563,200.”
This isn’t exactly news; I wrote about it a week earlier and the article quoted above pulls the same sleight of hand trick that Deutsche Bank did: it tries to create the idea of a 1:1 ratio between dwellings constructed and NOM in your head, which couldn’t be further from the truth. The average in Australia is actually around 2.5 people per dwelling, and if most of those new arrivals are backpackers or students – who are considered ‘migrants’ in the data, despite being on temporary visas – then the ratio of housing needed per new migrant could be much higher, or much lower (such is the nature of averages). And all one has to do is go to the actual ABS media release to confirm that is indeed what’s happening [emphasis mine]:
“Net overseas migration was driven by a large increase in arrivals (up 103 per cent from last year to 681,000) and only a small increase in overseas migrant departures (up 8.8 per cent to 226,600). This pattern, low departures in particular, is a catch-up effect after closed international borders, as international students return with only a small number departing because very few arrived during the pandemic. This effect is expected to be temporary as the number of departures will increase in the future as temporary students start departing in usual numbers.”
Remember that population growth went nowhere for a couple of years as our borders were closed; there was inevitably going to be a surge when they reopened. A proper analysis would sort by visa category, but alas we can’t do that until the migration data are released in December. In the meantime, I guess fearmongering about migrants “trampling the housing market” is what the
people media want.
The rest of the article, which critiques the Australian Government’s plan to build a lot more housing, at least makes some sense: the target of 1.2 million new homes over five years is ambitious considering the constraints, and even if it’s achieved, it won’t make much of a dent on housing affordability.
But responding to a supply problem by restricting demand – “moderate immigration to a level that is below the nation’s ability to supply housing and infrastructure” – just because we can’t get our shit together is defeatism at its finest, and is frankly un-Australian. You can ask questions about what the appropriate amount of immigration should be, and what types of people (e.g. age, education, skills) we might want to bring in. But how to house them really shouldn’t be an issue: a well functioning market will take care of that automatically.
Immigrants form the backbone of this country; rather than close up shop and destine ourselves to stagnation (Australia’s fertility rate is well below replacement levels), how about we just fix the housing market instead? The constraints are entirely imposed by government, so government should solve it.
Here’s a tip: start with granny flats and go from there!