Is it Supply or Demand Causing the Housing Problem?

In a recent Twitter post, Pauline Hanson attributed Queensland’s severe rental crisis to immigration. In contrast, ‘Property Centerpiece’ responded; 

“It’s more complicated then that. It’s due the increases in interest rates, council rates, insurances, cost of maintenance,  increase in levies and so on.”  

We believe it’s imperative to challenge such narratives held by those at ‘Property Centrepiece’. At the next election, the nation must hold Labor accountable for policies that have significant impacts on housing and family livelihoods. While Albo and Labor might attribute housing costs to ‘supply issues,’ their efforts to increase supply are seen as too little, too late. 

Labor’s neglect of the ‘demand on housing’ problem caused by immigration is dangerous and reckless. 

Make no mistake, One Nation has a raft of ‘supply’ policies ready to unroll. Senator Hanson has already articulated some of these in the Senate. But we do not think ‘supply’ will solve the problem; it is demand that’s doing the damage. More supply will help, but there is no doubt the government will just dial up the number of immigrants to fill those new buildings anyway. .. then it’s back to square one. 

Worryingly, according to the Australian Bureau of Statistics, total dwelling commencements in the June quarter of 2023 fell to 40,720 dwellings. This number includes 25,162 new private sector house commencements and 14,529 new private sector other residential commencements. Supply is slipping, according to official figures.  

New housing starts are but a fraction of the number of people coming to Australia needing a new home.  

For housing, it’s essential to acknowledge the impact of immigration as a demand-side pressure on housing prices. Even ABC News, in a report by Alan Kohler in March 2023, recognised immigration as the primary driver of property prices. 

One Nation recognises the rising costs and regulatory challenges faced by residential property investors. These factors, including insurance, fees, taxes, and red tape, impact the supply side, driving investors away from the market. A November 2023 ABC News article also highlighted how red tape is deterring investors from providing rental homes, especially in Victoria. 

If an investor drives the price of their rental higher than the market is willing to pay, then their property will remain vacant. Investors can’t just arbitrarily pass on increased fees to a tenant, because that tenant has the right to move out if they can get a cheaper rental down the road.  

Even though there are supply constraints, immigration is primarily to blame for the current crisis’s overwhelming demand. The influx of immigrants significantly exceeds the availability of housing, propelling prices upward. 

While ‘Property Centerpiece’s’ perspective is a valid opinion, and we respect free speech, it has an odour of Labor appeasement, and we think the government deserves no quarter. In a situation where immigration is surging, investors are limited to market-driven rents, and people are struggling to find affordable housing, the role of immigration as a key factor in the rental crisis becomes quite clear. This is a rare point of agreement between Pauline Hanson’s One Nation and ABC News – immigration is causing the rental crisis. 

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