Migrants are not to blame for the housing crisis

The argument that migrants are responsible for the housing crisis in Australia has no basis in fact and is propaganda in the service of the economic elites, writes Martin Barker.

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The Nazis and far-right racists (including the son of one of Australia’s largest property developers) who called the reactionary March for Australia on 31 August are demanding an end to mass migration because “Aussies are sleeping on the streets”.

It’s not just fascists linking migration to the housing crisis. Before the last election, both the Liberals and the ALP had migrants in their sights. “We’re going to cut immigration because Labor’s brought in a million people over two years and that has created the housing crisis”, Opposition Leader Peter Dutton said at the time. Labor criticised Dutton but conveyed essentially the same message in more acceptable language. Treasurer Jim Chalmers said of a proposed cap on international students: “Enrolments have grown ... this puts pressure on prices and rents ... it makes finding a house harder for everyone”.

Politics and the media blame migrants for the housing crisis, and it can seem to make sense. We’re told there aren’t enough houses to meet demand, so the more people there are, the more prices rise.

But the argument doesn’t stack up.

First, there is no shortage of houses in Australia. As the Australia Institute think tank reported in March, the construction of new dwellings has outpaced population growth for the last ten years. Indeed, according to the Australian Bureau of Statistics, the number of residential properties in Australia exceeds the number of households by almost 1 million.

Second, there is no meaningful connection between immigration levels and rents. As TikTok user @acutallyadu has pointed out, the proportion of housing relative to the population in 2014 was roughly the same as today, but rent price growth in 2014 was 1.2 percent compared to 8.1 percent in 2023. Similarly, the Tenants Union of NSW has created a dashboard comparing rental price changes to population changes, which shows that there isn’t a strong link between the two. (One example: rent prices in the Sydney suburb of Ryde fell by 5 percent in 2019 and rose by more than 7 percent in 2022, but 33 percent more migrants moved into Ryde in 2019 compared to 2022.)

It’s the same with house prices. At times, prices have fallen while immigration has increased, and prices have gone up when immigration has reduced. During the COVID-19 border closures, there was negative net migration, meaning more people left the country than came in; but house prices rose by 20 percent in eighteen months.

International students in particular have been blamed for high rents and low vacancy rates in the suburbs surrounding major universities. The Reserve Bank of Australia found that the return of international students after lockdowns had a marginal effect on rents, contributing at most 0.5 percentage points to rent increases. The majority of rent increases occurred before the borders were reopened, jumping by 13.8 percent between 2021 and 2022.

So if migrants aren’t to blame, why are house prices and rents so unaffordable?

House prices and rents are soaring because access to housing in Australia is dominated by a for-profit market that is rigged in the interests of billionaire developers and wealthy investors.

Developers like Mirvac and Meriton (owned by Australia’s second-richest person, Harry Triguboff) are making a killing from high house prices. Meriton made $290 million in profits last year, and Mirvac more than $500 million. And that’s only two of the companies that dominate the housing market.

Their only concern is profit, and they have a clear interest in higher house prices. In April, the Melbourne Age newspaper reported that developers in Melbourne were letting 8,000 properties sit empty because prices weren’t high enough, and selling them too quickly would bring down the cost to buyers.

Developers receive tax and development concessions from the government and benefit from policies like the First Home Buyers scheme, which claims to make it easier for people to buy, but actually drives up prices.

The tiny proportion of investors who own most investment properties (1 percent of taxpayers own more than 25 percent of them) also want to drive up prices. They receive massive handouts from the government that subsidise their speculation, which increases prices and allows them to out-compete first-home buyers for properties.

Negative gearing (when a property costs more to maintain than it generates in income, even if it is increasing in value) allows them to claim losses as a tax deduction, and capital gains tax discounts mean they pocket more of the returns when they sell. The ABC reported last year that CGT discounts cost the public $23 billion, with 80 percent of the benefits going to the top 10 percent of taxpayers.

These government handouts mean that investors and developers can sit on properties until the price is right. Some rent them out, others leave them empty, knowing they’ll get a tax concession when they sell. That’s why Prosper Australia, a research and advocacy group, estimates that there are 100,000 empty or “barely used” properties in Melbourne while 30,000 Victorians are homeless.

Blaming migrants for the housing crisis shifts the blame away from those who are actually responsible: big corporations and banks, the super-wealthy and Labor and Liberal governments. Migrant bashing is about dividing workers to make it harder for us to unite and fight against our common enemy. The super-rich would much rather have us blaming each other for unaffordable homes than aiming our sights on them.

The argument that migrants are responsible for the housing crisis in Australia has no basis in fact and is propaganda in the service of the economic elites.

Even if there were a housing shortage and migration was having a measurable impact on housing affordability, socialists would still oppose blaming immigrants and imposing migration controls.

Australia is one of the wealthiest countries in the world. We have more than enough resources and productive capacity to comfortably house a significantly larger population. The problem is that the vast majority of that wealth is owned and controlled by a tiny minority of the population, whose sole concern is making profits.

The housing crisis won’t be fixed by blaming migrants or limiting immigration. The solutions lie in challenging the market’s domination over access to housing, the power and wealth of developers and investors, and the Labor and Liberal governments that act in their interests.