Australians are increasingly being forced to live in Chinese-style high-rise apartment towers because record immigration has made houses and even some units so unaffordable.
The NSW Labor government has blamed a surging population for the state’s ‘housing affordability crisis’ as the ALP delivered its first state Budget since 2010.
Those wanting to buy rather than rent in Australia’s biggest cities are often restricted to suburban units because buying a house in an outer suburb, or an inner-city unit, would put them in mortgage stress.
The federal government opens the floodgates to immigration while state governments are often left either paying the bill for new social housing, or bribing local councils to approve more high-rise developments.
While Canberra has established a $10billion Housing Australia Future Fund to build 30,000 new affordable homes over five years, state governments also have to pick up the tab for housing, not to mention transport congestion.
Australia’s population growth pace of 2.2 per cent is already among the highest in the first world.
NSW Treasurer Daniel Mookhey’s first Budget on Tuesday announced Labor would be ‘building more social and affordable housing’ with a $2.2billion Housing Infrastructure Plan to ‘build more houses’.
‘NSW is in the midst of a fierce housing crisis,’ he said in his Budget speech.
Australians are increasingly living in Chinese-style high-rise apartment towers because record immigration has made houses so unaffordable (pictured are units at Epping in Sydney’s north)
‘Rents are rising. Interest rates are climbing. Home ownership rates are falling.
‘Demand for social housing is increasing. Homelessness is worsening.
‘And the next generation fears permanent eviction from safe and secure housing.’
His Treasury Budget papers blamed population growth for unaffordable housing, after the Australian Bureau of Statistics revealed a record 454,400 migrants moved to Australia, on a net basis, in the year to March.
Sydney houses a bigger share of these new overseas arrivals, along with Melbourne in Victoria.
‘The government is committed to increasing housing supply to support the state’s growing population and to help alleviate the housing affordability crisis,’ NSW Treasury said.
David Llewellyn-Smith, the chief strategist with MB Super and Nucleus Wealth, said state governments were often left paying the bill for high immigration, pushed by big business elites and Treasury bureaucrats in Canberra.
‘The Australian Treasury is very much on board with population growth because one of its primary goals is to keep the Budget in good fettle,’ he told Daily Mail Australia.
‘But the problem is there’s what we’d call a vertical-fiscal imbalance which means that although the federal Budget gets repaired, all of the costs of population growth go the states.
‘So their Budgets all get wrecked by it because they’re spending a fortune trying to invest in all of this infrastructure.’
While the federal government has boasted of a near-record $19billion Budget surplus for 2022-23, NSW will have a $10.1billion deficit for the same financial year.
A NSW surplus is not expected until 2024-25 and even then it will be a small $844million.
The demand for housing is so strong the NSW government has announced a $38.7million Faster Planning Program giving local councils incentives to speed up development applications.
The federal government opens the floodgates to immigration while state governments are often left either paying the bill for new social housing and transport congestion (pictured is Sydney Olympic Park train station)
NSW Treasurer Daniel Mookhey has declared the state is in the midst of a ‘fierce housing crisis’ (he is pictured left with state Finance Minister Courtney Houssos)
Woollahra council, in the wealthiest part of Sydney’s exclusive eastern suburbs near the city is on the list, along with the local government areas that actually house more migrants, including Fairfield.
With houses in short supply, the state Budget has allocated $300million in reinvested dividends to enable Landcom, the state government’s property developer, to deliver an extra 1,409 affordable homes and 3,288 market homes out to 2039-40.
Landcom has also been allocated another $60million to deliver 100 build-to-rent homes on the South Coast and Northern Rivers, targeting 20 per cent affordable rental housing.
Mr Llewellyn-Smith said high population had damaged living standards with Australia in a per capita recession where output for every individual is declining.
‘The vast majority of people are going backwards – it’s fair to characterise that as a class war,’ he said.
‘The federal government is a vested interest in the model – the higher population contributes to repair for the Budget even though living standards are falling.
‘This whole thing is about a political economy where you have an elite group of big corporations that are winners and you have politicians that can claim to be doing a good job.’
David Llewellyn-Smith, the chief strategist with MB Super and Nucleus Wealth , said state governments were often left paying the bill for high immigration, pushed by big business elites and Treasury bureaucrats in Canberra
Western Sydney was already taking in a bigger share of migrants before Australia reopened its borders, with the broader Parramatta area seeing its population surge by 10 per cent to 493,515 between the 2016 and 2021 Census surveys.
Mr Llewellyn-Smith said ‘extreme’ population growth made it hard to accommodate so many new residents.
‘When you’re running so much population growth, so fast, there’s absolutely no way that you can plan for and accommodate so many new people,’ he said.
‘So you get all of these spillovers into reduced living standards which is what’s really happening.’
Almost a third or 30.9 per cent of capital city housing stock is now apartments, up from 22.9 per cent in early 2010, CoreLogic data showed.
But in Sydney, the city’s median apartment price of $822,145 is so dear that an average, full-time worker on $95,581 would be in mortgage stress, even with a 20 per cent mortgage deposit.
That’s because a $657,716 mortgage would be beyond the ‘six’ threshold defined as a dangerous debt level.