The Immigration Minister Andrew Giles has just revealed that he’s processed more than two million visas since the election.
He urgently needs to start talking to the Minister for Housing, Julie Collins, or else most of those people will be living in tents.
If the Labor government doesn’t start co-ordinating immigration and housing, the mixture will be explosive, because Australia’s housing crisis is going to be horrific next year.
The visa backlog has only come down from one million to 872,000 despite two million being approved, because the applications are now pouring in – 2.22 million have come in since June 1 says Andrew Giles, more than four times as many as the same period last year.
According to ABS data, approvals for student and working holiday visas are back to pre-pandemic levels, about 55,000 a month in total.
And at the jobs and skills summit, Giles announced an increase in the permanent migration intake from 160,000 to 195,000, or 16,000 a month.
In other words, the Labor government has heard businesses complaining about staff shortages, and perhaps also the Reserve Bank muttering about needing to keep wages in check, and has flung open Australia’s doors.
But where are they all going to live?
The national rental vacancy rate is 1.1 per cent, which means in the whole of Australia there are currently 51,437 rental vacancies according to SQM Research, but most new arrivals want to live in a city so the capital cities total is more relevant – 37,626.
That’s about half of one month’s new arrivals.
The direst labour shortages are in Victoria’s south-west, centred on Warrnambool, and Sydney’s Hills District, each with unemployment rates of 1.1 per cent. Almost every shop has a “staff wanted” sign out the front.
But the rental vacancy rate in the Hills District is 1.7 per cent and in Warrnambool it’s 0.3 per cent.
To be more specific there are 302 jobs advertised on Seek in Warrnambool, but only 163 places to rent.
In Kalgoorlie and Cairns, it’s much worse. There are 962 jobs on Seek in Kalgoorlie but only 74 rental vacancies, and in Cairns, businesses are looking for 1873 people and there are 361 places for them to rent.
Melbourne has 126,600 job vacancies according to the ABS, 10 times the 12,665 rental vacancies; in Sydney it’s 150,800 jobs versus 14,444 places to rent. Nationally there are five times as many job vacancies as there are houses and flats available to rent.
Some of the shortage has to do with places being taken out of the permanent rental pool and put on Airbnb.
In Australia’s capital cities there are now more Airbnb short-term rentals available than long-term leases – a total of 38,677 against 37,626 normal rentals.
The biggest disparity is in Adelaide, where there are twice as many on Airbnb than are available for longer-term rental. In Melbourne it’s 15,277 on Airbnb against 12,665 normal rental vacancies; only in Sydney are there fewer short-term rentals than long term – 9814 versus 14,444.
In general there is now a massive discrepancy between the demand for labour, the immigration needed to fill it, and the available housing.
The government’s efforts to help businesses get staff from overseas are laudable, but if this isn’t combined with an equally serious effort to create more accommodation, we’re heading for a much worse housing crisis than we have now, and that’s saying something.
In the election campaign, Anthony Albanese promised to set up a $10 billion fund that will build 10,000 homes a year.
Meanwhile, it has approved two million visas when there are 51,437 homes currently available to rent.
So obviously, the Labor housing policy is hopelessly inadequate and when combined with its immigration policy, it’s downright dangerous.
Part of the solution might be to persuade more landlords to take their properties off Airbnb and make them available for long-term rental.
One reason property owners are going for Airbnb instead of the rental market is better yield. As a random example, three-bedroom houses in Marrickville, NSW, are being advertised for $1000 a week; on Airbnb they’re getting between $2000 and $4000 a week – so at least twice as much, which means you only have to rent it half the time to be ahead.
But it’s also true that landlords have more control on Airbnb, especially with state governments passing new laws that better protect tenants.
Those laws won’t be repealed, and shouldn’t be, so the government might have to entice landlords back to the long-term rental market with a tax incentive on top of negative gearing.
In any case, that still wouldn’t be anywhere near enough: Even if all properties on Airbnb in Australia were added to the long-term rental market, that would still only account for one month’s worth of new arrivals on student, working holiday and permanent migrant visas.
The government is simply going to have to build a multiple of the 10,000 houses a year that it has promised.
Yes, the federal government debt is currently $892.3 billion, still rising.
It’ll just have to be put on the tab.
Alan Kohler writes twice a week for The New Daily. He is also editor in chief of Eureka Report and finance presenter on ABC news
