New South Wales Premier Chris Minns has said he supports high levels of immigration despite Sydney being very unaffordable and congested – so more foreigners can build new high-rise apartments.
A record 454,400 foreign migrants moved to Australia in the year to March, the majority of them moving to Sydney, one of the world’s most unaffordable housing markets.
The situation has become so dire that the Paris-based OECD has raised concerns that Australia’s high population growth and undersupply of housing would drive up house prices.
Labor’s first NSW budget since 2010, tabled on Tuesday, promised the state government would build just 4,700 homes over 16 years, despite Sydney having to accept 100,000 new foreign migrants every year.
Despite the population influx, Mr Minns said he supported record levels of immigration and argued more migrants were needed to build homes and apartments in Australia’s most populous state.
“We support the Commonwealth Government’s decision to increase immigration to New South Wales, regardless of the fact that we will be accepting not the majority but the largest number of immigrants,” he said on the ABC’s 7.30 program on Tuesday .
New South Wales Premier Chris Minns has revealed that despite Sydney being very unaffordable and congested, he supports high levels of immigration – so that foreigners can build new homes (he is pictured in the middle with State Housing Minister Rose Jackson).
“A lot of the workforce coming into the state will be directed to the housing market, and we need them to build houses and apartments.”
Mr Minns also advocated for planning laws to be relaxed to allow more homes to be built in established suburbs, rather than clearing land to build new homes in the outermost suburbs.
“It means more urban densification, it means more apartments and residential units,” he said.
“My job is to create the infrastructure and reduce the bureaucracy that blocks this type of housing provision for the state.”
Mr Minns argued that more housing would improve affordability, although couples with children often prefer a home with a backyard.
“If we can get this going and be first on the East Coast at least, we can alleviate some of the housing challenges that young people in New South Wales in particular are facing,” he said.
“We believe we have enough capacity for large-scale infill developments, i.e. high-rise apartments, particularly close to the CBD.”
Sydney is so unaffordable that even apartments are expensive. The average unit price of $822,145 is out of reach of the average earner’s $95,581, based on CoreLogic’s August home price data.
A dozen rate hikes since May 2022 mean a bank can’t lend anyone more than six times their income.
Sydney’s median house price of $1,359,936 is so high that a borrower with a 20 per cent deposit would need to earn $181,000 – putting them in the top four per cent of earners – to avoid mortgage stress devices.
Mr Minns’ support for high immigration stands in stark contrast to Bob Carr, who called for deep cuts to immigration as NSW Labor premier in the late 1990s.
Mr Carr’s demand was ignored because net overseas immigration rose steadily into six figures from 1999, when John Howard was Liberal prime minister, and the numbers continued to rise even outside of the Covid pandemic.
AMP chief economist Shane Oliver expects Australia will face a 285,000 housing shortage by mid-2024 and is calling for net overseas immigration to be halved to 200,000 – from around 500,000 currently – so that housing supply can keep up with population growth.
Australia’s population growth rate of 2.2 percent is among the highest in the developed world.
Canada’s population grew by 3.4 per cent in the year to June 2023.
After Hong Kong, Sydney is the most unaffordable property market in the world when comparing average income to average property prices, followed by Vancouver, Honolulu, San Jose and Los Angeles.
The Paris-based OECD is so concerned that it has found a link between high immigration and unaffordable housing in Australia.
“Supported by structural factors such as robust population growth and a limited inventory of homes for sale, prices have rebounded in a number of countries, including the United States, Canada and Australia,” said the interim report published in September this week.
Despite the population influx, Mr Minns said he supported record levels of immigration and argued more migrants were needed to build houses and apartments (pictured are Construction, Forestry, Maritime, Mining and Energy Union workers in Brisbane , which typically build apartments).
Mr Minns argued that more housing would improve affordability, although couples with children often prefer a house with a backyard (pictured are residential towers in Parramatta in Sydney’s west).
While the federal government’s $10 billion Housing Australia Future Fund aims to build 30,000 social homes within five years, the New South Wales government is aiming to build a more modest 4,700 homes within 16 years.
The state budget included, among other things: $2.2 billion housing and infrastructure plan.
This includes $1.5 billion to build roads, parks, hospitals and schools to support the construction of new homes in Sydney, the lower Hunter, the Central Coast and the Illawarra.
The package was worth $300 million enable Landcom, the state government’s property developer, to deliver a further 1,409 affordable homes and 3,288 market properties by 2039/40.
Mr Minns admitted he needed help from Canberra to build more houses.
“We will always seek the help of the Commonwealth Government, particularly when it comes to houses,” he said.
Sydney and Melbourne were home to 56 percent of new migrants between 2000 and 2021, data from the Australian Bureau of Statistics showed.
Broken down, Sydney hosted 29.3 percent of new immigrants, compared to Melbourne’s 26.6 percent.
Parts of Western Sydney saw the strongest population growth, with the wider Parramatta area seeing a 10 per cent increase in population between the 2016 and 2021 census surveys.