Finance guru Alan Kohler has said excess immigration is to blame for Australia’s housing crisis, and it is being fuelled by the influx of international university students.
Kohler, the ABC’s finance expert, said it is not the permanent migration of workers that is chiefly responsible for the soaring demand – and prices – for homes, but the burgeoning number of foreign university students.
‘Most of Australia’s migrant intake has been outsourced to universities and colleges, who see new arrivals as customers rather than migrants,’ he wrote in a piece for The New Daily.
‘They (universities) use ‘education agents’ in other countries to recruit them, paying sales commissions to spur them on.’
Kohler regarded the agents as being ‘bit like legal people smugglers’ – eager to take their cut but with no interest in the negative consequences.
Kohler said it was policy changes to immigration in 2001 under the Howard government that saw Australia ‘change forever’.
The changes have made it much easier for students from countries such as India, China, and Pakistan to enter and gain permanent residency, compared to before when it was ‘almost impossible,’ Mr Kohler explained.
Kohler said that under the changes, Australia’s migrant intake – including students – tripled to 300,000 a year between 2005 and 2008.
Finance guru Alan Kohler has said excess immigration is to blame for Australia’s housing crisis, which is only being fuelled by the influx of international university students
The Albanese Government is now planning to cap the number of international students being accepted into universities.
The proposal is widely opposed by tertiary education providers, who have become increasingly reliant on the up-front fees paid by foreign students rather than the local students paying off HECS.
It’s understood the cap on numbers could rise if the tertiary institutions funded student accommodation, thus easing the fierce competition for properties in the broader rental market with Australia’s big cities having an ultra-tight vacancy rate of 1.3 per cent.
Any reduction in the number of international students would significantly dent the revenue streams for universities, having a knock-on effect on funds available for research projects.
‘The current Labor government’s point of view is that the universities have become addicted to foreign students and they should not be deciding Australia’s population growth based on their desire for revenue,’ Kohler explained.
‘Also universities really need the money in the absence of government funding – without foreign students, research would dry up and the national science effort would suffer.’
The imbalances created by a soaring population is not just felt in the rental market and house prices, but labour shortages – particularly in the construction sector.
That has sent the prices commanded by tradespeople soaring which in turn has led to the collapse of a record number of construction companies, and yet more shortages in the supply of homes.
The Albanese Government’s goal of 1.2 million new homes by 2029 was predicted to fail almost from the time it was announced, and is already behind schedule.
The target requires 240,000 homes to be built each year but that number is now sitting at just 150,000.
The government is also hoping to bring net overseas migration down to 260,000 in this financial year, after hitting 547,300 in 2023.
‘Getting Australia’s population growth down to something approaching the actual capacity of the construction industry to build houses for them all – as opposed to what the government might wish it was – is not going to be easy,’ Kohler said.
An Australian earning an average, full-time salary of $100,017 would only be able to buy a $650,110 home with a 20 per cent deposit of $130,022, with the banks only able to lend someone 5.2 times their salary before tax.
This individual would be in mortgage stress buying the typical unit in Melbourne or Brisbane and paying $3,353 a month in home loan repayments – or more than a third of their pay.
Someone renting in Sydney, where $694 is the median weekly unit rent, would be giving almost $3,100 a month to a landlord.
The middle-priced house in Australia’s major capital cities is beyond the reach of the average Australian worker buying on their own, which means they are limited to units or a home with a small backyard in a far, outer suburb.
The government is now planning to cap the number of international students being accepted into universities (stock image of the University of New South Wales)