Immigration and the housing crisis

Immigrants contribute vastly to expanding the cultural, social, and economic structure of Australia; our population is vastly comprised of migrants, who contribute not only to our economy but also help shape how cities are developed and changed.?

After a tough closure of our international borders, in 2023 we were set to welcome back our immigrants in full force and help us close some of the gaps in our current skills shortage. But rising interest rests, inflation, and increasing renting prices might prove to be offputting for our future workforce.?

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Link Between the skills shortage and the housing market:?

Economic theories explain that a well-functioning labour market requires good labour mobility, where skilled workers are free to move to fill in the skills gap. A lack of affordable and secure housing options limits the ability of workers to easily move between regions and undermines the efficiency of the labour market.??

For example: Since March 2020 the number of job vacancies on the Sunshine Coast has more than doubled, increasing by a total of 2,263 positions. Over the same time, the number of rental vacancies has fallen from 874 in March 2020 (1.4 percent vacancy rate) to 419 (0.8 percent 8 vacancy rate) in June 2022.?

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Housing Demand:?

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Studies often highlight income and wages as economic features that influence housing demand. While regulatory constraints are often ignored when housing prices are discussed, one significant regulatory constraint to consider is the tax incentives for owner–occupiers to upgrade and investors to purchase existing residential property. Individuals under this incentive might refuse to rent or sell contributing to the current housing crisis.???

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The aging factor has rarely been acknowledged and plays a significant role in the current housing crisis. Projections from various data sources indicate that around 15,000 more dwellings each year will be occupied by the increasing numbers of older resident households (Approximately 55-65) in 2023.?

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Rentals and Airbnb's:?

Data produced by ABC, have indicated that the number of short-term rentals has drastically reduced from pre-pandemic levels. Vacancy rates across the country have fallen to record lows while renting prices continue to increase, experts explain that digital platforms such as Airbnb and Stayz contribute significantly to the housing supply.?

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Advertised rental prices rose by 6.7 percent, up from an increase of 4.7 percent over the 2021 calendar year according to market insight platform PropTrack.?

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The housing crisis and immigrants:??

Studies have indicated that housing prices are driven by the demand side and reflect the labour market. The migrant population is more vulnerable to urban poverty, social deprivation, and the spatial segregation phenomenon.???

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Previous studies show us that migrant families usually take several years before they can purchase within the housing market. A vast majority tend to rent and many young adults tend to look to outer suburbs and the fringe for affordable property.??

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Consider that many immigrants cluster around certain suburbs to facilitate internal mobility, and spatial segregation is often a result of immigrants trying to improve their chances of sharing knowledge, job opportunities, and customs.???

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The most vulnerable sections of our migrants are our international students. International students heading to Australia to study this month are finding it harder to locate accommodation, prompting desperate calls from universities for staff to offer beds in their own homes to accommodate them. In major cities e.g. Sydney and Melbourne, the inflow of students and young skilled workers is high, but these migrants also tend to occupy student accommodations or low-rent housing which are mostly not suitable for families and usually lack the income to make significant housing purchases.?

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?Conclusion???

Housing prices are expected to increase in the cities populated by immigrants; however, this result may vary for different urban areas which might be a reflection of the significant differences in urban and rural structural planning.??

It comes as no surprise that even without further net overseas migration, the number of resident households in urban Australia will increase significantly over the decade.??

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While the government has been working on the housing crisis for quite some time, with the inflow of international students and the need for migrant workers to fill our skills shortage local leaders across the county, investors, business owners, developers, nonprofit providers, and residents of goodwill need to step up, join forces and actively seek creative housing solutions.?