Why Australia shouldn’t pin its housing crisis on immigration

A high immigration rate – one person was arriving to live in Australia every minute – was a boon to the economy, prolonging a record-breaking recession-free run that stretched back to 1991. It also cemented Australia’s position as one of the world’s most successful multicultural societies.

Although net migration is expected to decrease next year, Australia’s population is still forecast to grow at an annual rate of 1.4 per cent in 2025 and 2026. Indeed, by 2034, the population is expected to increase to 30.9 million, government data shows.

According to real estate firm CBRE, the projected increase in Australia’s population between last year and 2025 translates into incremental demand for 5.2 million square metres (56 million square feet) of industrial and logistics space, 1.1 million square metres of retail space, 13,500 hotel rooms and 475,000 homes.

The stark contrast between Japan’s demographic crunch and Australia’s population growth is perhaps one reason Japanese investors deployed more capital in Australia last year than they have in the past 20 years combined, investing heavily in BTR projects.

Shopping centres also hold appeal for investors, in part due to higher rental yields but also because of high demand. According to Colliers, Australia risks running out of shopping centre space over the next decade due to a scarcity of available development sites and other logistical constraints.

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Travel between India and Australia likely to increase after migration deal signed in Sydney

However, these supply-demand imbalances are at the core of the problems high immigration have amplified. Population growth is significantly outpacing economic output, resulting in an outright contraction in output per head. In some areas of