Amidst the challenges of rising living costs and housing shortages Australia is experiencing an increase, in the number of migrants arriving in the country. It is projected that by September the number of arrivals will reach 500,000. Recent statistics from August indicate that 413,530 individuals from overseas including workers, international students and long-term visitors have relocated to Australia. This represents a doubling compared to the timeframe, in 2022.
Abdul Rizvi, a former deputy secretary of the Department of Immigration, suggests these latest figures indicate that the Treasury significantly underestimated immigration levels since Australia’s reopening in late 2021. The government’s original forecast was 400,000 for 2022-23 and 315,000 for 2023-24.
The sudden surge, in population is causing pressure on resources, like housing, roads, hospitals and schools. At the time Australia’s economy has been negatively affected by rising inflation and increasing house prices despite the Reserve Bank raising interest rates on 12 occasions since May 2022.
Australia’s population growth currently stands at 2.2%, ranking among the highest in the developed world. This places it alongside Canada and Singapore and harks back to growth rates recorded during the Global Financial Crisis in 2008. Housing prices are expected to skyrocket further in 2023 and 2024 due to this ongoing population surge.
With house affordability already an issue for many Australians – Sydney’s median house price currently stands at $1.381 million – future increases projected at 11.6% in 2023 and a subsequent 5% boost in 2024 paint a stark picture for those on lower incomes seeking to enter the property market.
Australia’s ongoing population growth poses challenges that need to be addressed through the implementation of policies. These policies should focus on tackling issues such, as ensuring housing, developing infrastructure and maintaining economic stability.
According to CoreLogic data, the median house price is predicted to soar to $1.431 million by the end of next year. In Brisbane, the current median house price sits at $848,680, but NAB forecasts a 12.1% increase in 2023 and an additional 6.5% growth in 2024. This would elevate prices to $938,614.
Perth, as Australia’s most affordable state capital city market, has a median house price of $646,777. NAB expects an 11.9% increase in 2023 and a modest 1.2% growth next year, leading to a mid-point price of $664,419—rising from a lower base of $586,721 at the end of 2022.
Renters are also feeling the pinch as the national vacancy rate rests at a mere 1.1%, according to SQM Research data. Capital city rents have skyrocketed by 16.2% in the year to October, reaching $684 per week.
The Business Council of Australia, representing large corporations, has advocated for an immigration surge to recover from the 84,900 net immigration drop in 2020-21 caused by the pandemic. Since the border reopening in December 2021, immigration levels have more than doubled with 170,900 net arrivals recorded in 2021-22.
Australia is encountering a record influx of migrants which has exacerbated the current cost of living crisis. The nation faces immense pressure on resources, infrastructure, and housing as the population growth rate climbs to one of the most noteworthy within the developed world. House prices and rental costs continue to take off, making affordability more challenging for lower-income people. To address these issues, it is significant for effective policies to be implemented, centering on housing affordability, infrastructure development, and financial stability. Failing to do so may lead to further deepening of challenges confronted by both Australian citizens and new arrivals, threatening social cohesion and long-term success.