Cut migrants to ease rental crisis – expert

A leading property analyst says the Australian government’s target of building 1.2 million new homes is pie in the sky.

“I have a better chance of winning Lotto next week – and I don’t even have a ticket,” says Property Investment Professionals of Australia (PIPA) Chair Nicola McDougall.

“There is no question that we are in the middle of a housing crisis, with not enough dwellings available for rent or purchase in many areas of the country,” Ms McDougall said in a press release this week.

“Of course, we have heard the repeated assertions by the Federal Government of its plan to support the construction of 1.2 million new dwellings over the next five years, but everyone knows that figure has no basis in reality.”

According to the Australian Bureau of Statistics, net overseas migration was a staggering 550,000 in the year ending 30 September 2023 – “a mind-boggling figure when we consider the lack of housing supply currently available for renters,” Ms McDougall said.

“Not only does that tap need to be turned off dramatically, but more needs to be done at a policy level to encourage investors back into the market to help remedy the rental catastrophe.

“An immediate reduction in the three percentage point borrowing serviceability buffer would be a good place to start.”

The shortage of rental properties is pushing rents up across Australia. The first quarter of this year has continued to produce strong results with constrained listings underpinning Adelaide, Brisbane, and Perth in particular, according to the latest PIPA National Market Update.

This report pulls together insights and analysis from seven market experts and PIPA members from the latest edition of the PIPA Adviser e-magazine’s national market update.
Ms McDougall said some commentators have called time on the peak of buyer interest and sales activity in Perth, with median prices yet to reflect this potential state of play.

Market conditions in Brisbane and Adelaide remain robust, with Sydney resilient and Melbourne mostly stable – albeit with the significant exodus of investors from Victoria set to continue to negatively impact its rental crisis, she said.