Australian PM rejects calls for immigration to be curbed due to high house prices

by Ray Clancy on February 28, 2017

in Australia Immigration, Property in Australia

Australia is not set to curb immigration with skilled and professional people from abroad regarded as an important part of the country’s nation building, according to Prime Minister Malcolm Turnbull.

He has defended Australia’s immigration programme against calls for it to be reduced. In particular there are concerns that it is causing house prices to rise in the major cities such as Sydney and Melbourne where many expats end up living.

‘It is not a question of setting arbitrary targets, it’s a question of getting the best and the brightest from the world that will meet the demands of our economy and help grow the economy,’ Turnbull told 3AW radio.

A number of politicians and prominent business people have claimed that the rise in immigration means that house prices are rising to such an extent that young families cannot afford to buy a home. Indeed, the latest figures from real estate firm CoreLogic show that prices in capital cities across Australia increased by 10.7% in the 12 months to January 2017, led by Sydney and Melbourne.

Sydney stood out as recording the highest annual capital gains with values up 16% over the past 12 months, the highest annual rate of growth since the year ending in September 2015. Since the current price growth cycle began in June 2012, prices in Sydney have increased by a cumulative 70.5%.

‘The most fundamental right is to get a house with a backyard. Young couples can’t do that anymore, purely driven in 95% of cases by the enormous population increase, mainly driven by ridiculous immigration,’ said entrepreneur Dick Smith.

A recent report by the Migration Council of Australia said that by 2050 immigration will have added 21% to the real wages of low skilled workers, and will be contributing $1.6 trillion to the country’s gross domestic product.

According to the Department of Immigration and Border Protection (DIBP) the majority of the 190,000 migrant places offered by Australia each year are in skilled migration, attracting people with a high level of education and who tend to be of prime working age.

It comes at a time when the Government has recognised that there is a housing affordability crisis. Officials are currently looking at a variety of ideas from deposit-free home loans to high-speed rail links that mean people can live outside cities but commute into work.

However, according to the Housing Industry Association immigration is not to blame for rising house prices. ‘Difficult affordability in the housing sector is primarily the result of supply side issues, like taxation of new housing, infrastructure funding, the slow release of land, and bottlenecks in the planning system,’ said Shane Garrett, HIA senior economist.

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