Migration contributes to population growth and therefore creates additional housing demand, but there are significant structural issues on the supply, financing and regulatory sides of the housing market that also need to be considered.
1. Overseas migration is not the sole explanation for the housing crisis
As per the 2021 Census, approximately 33% of Australians—around 9 million people—were born overseas. Australia has historically relied on migration to address skills shortages, support productivity and innovation, contribute to an ageing population and strengthen the economy.
The Department of Home Affairs’ 2024–25 Migration Program Report provides some useful context:
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Migration delivers significant economic value: Australia’s 2024–25 permanent Migration Program provided 185,001 places, of which 132,148, or 71.4%, were in the Skill stream, designed in part to support Australia’s labour market and productive capacity.
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Migrants fill important workforce gaps: Skilled migration included occupations such as registered nurses, software and applications programmers and chefs, contributing to healthcare, technology, hospitality and other sectors.
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Migration supports regional Australia: 32,948 skilled places were delivered through regional categories, supporting employers and communities outside the major capitals.
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Permanent migration does not necessarily mean an equivalent number of new arrivals: approximately 80,095 Skill-stream visa recipients—around 61%—were already in Australia when they applied. Therefore, granting those permanent visas did not represent 132,148 additional people suddenly entering Australia and requiring new housing.
This does not mean migration has no impact on housing demand. It clearly does. The point is that attributing the housing crisis predominantly to migration risks overlooking the supply-side and financial factors that are also contributing to housing pressure.
2. Housing supply, completions and utilisation
There is also an important question about how effectively Australia’s existing housing stock is being utilised.
Australia has a substantial number of unoccupied dwellings, and Census data has consistently identified 1,000,000 (1 million, not typo) dwellings as unoccupied. There is also a large number of spare bedrooms (13,000,000, yes 13 million) within the existing housing stock.
More importantly, ABS data shows that housing supply has struggled to keep pace with population growth. Over the 2016–2025 period, my analysis of ABS data indicates that average annual dwelling completions were approximately 192,700, compared with average annual Net Overseas Migration (NOM) of approximately 253,788. And at 2.5 people per household, 101,515 dwellings were enough to accomodate these migrants. Therefore, 91,185 dwellings were still available on average each year to accomodate 227,962 people born in Australia.
However, I think this comparison needs to be interpreted carefully: NOM is a population-flow measure, whereas dwelling completions are a housing-supply measure, so they cannot simply be compared one-for-one.
The more useful policy question is therefore:
Are Australia’s governments coordinating population planning, housing construction, infrastructure, land release and planning approvals sufficiently well to ensure that housing supply responds to population growth?
In my view, Australia needs much better coordination between migration and housing policy, rather than treating the two as separate policy areas.
3. Systemic issues: cash purchases, equity and access to finance
There are also structural characteristics of the Australian property market that deserve greater attention.
3.1 Cash purchases
PEXA research has shown that more than one in four residential property purchases in NSW, Victoria and Queensland were made without a mortgage. For 2023, the figure was reported at approximately 28.5% across those three eastern states. AML/CTF laws came into force this year 1st July onwards only. Prior to that, there was no checks regarding the source of money.
This is important because housing demand is not driven solely by people obtaining new mortgages. A significant volume of transactions is supported by cash, existing wealth and accumulated property equity.
3.2 Substantial housing equity
Recent market estimates put the value of Australia’s residential property at approximately $12.2 trillion, with outstanding mortgages of around $2.6 trillion. This means there is 78.7% of housing equity across the Australian property market.
This accumulated equity can provide existing property owners with considerable borrowing capacity, allowing them to compete for additional properties without necessarily requiring the same level of savings as a first-home buyer.
3.3 Mortgage lending and fraud risks
Around 8 in 10 new home loans are arranged through mortgage brokers, making brokers a major part of Australia’s residential lending system.
At the same time, AUSTRAC’s Fintel Alliance recently identified coordinated suspected mortgage fraud across 10 major Australian banks through Operation Claw. The investigation identified suspected inflated incomes, misrepresented employment, fabricated or unverifiable business activity and falsified or misleading documents. It also identified repeated involvement of mortgage brokers, accountants and law firms in multiple applications.
In 2021, a UBS survey of around 900 Australian mortgage borrowers found that 41% said their loan applications were not completely factually accurate. The figure was higher among borrowers who used mortgage brokers—44%, compared with 29% for borrowers who applied directly through a bank.
There are also financial incentives within the referral system. Mortgage brokers can receive upfront commissions of around 0.55%–0.65% of the loan amount, depending on the lender. CommBank’s Unloan referral program has also offered eligible introducers, including accountants, 0.33% of the value of a settled loan.
More recently, Commonwealth Bank reported approximately $1 billion in potentially fraudulent home loans to authorities, involving suspected doctored applications and false documents, including AI-generated documents. ASIC told a parliamentary committee in March 2026 that it had begun compliance inquiries into the matter.
This does not mean that the mortgage-broking industry as a whole is involved in fraud. Rather, it demonstrates that the lending system has vulnerabilities that regulators and financial institutions need to address.
The existence of these issues raises a broader question: to what extent are housing prices being influenced by the availability and quality of credit, existing equity and purchasing power, rather than simply by the number of people entering Australia?
4. Productivity Commission — housing supply and regulation
The Productivity Commission’s 27 July 2026 interim report on Housing Supply Regulation provides particularly strong evidence that supply-side constraints deserve attention. And in March 2026, the Commission reiterated that housing construction productivity had fallen 53% over 30 years, while noting that the average time to complete a detached house had increased from about 6.4 months a decade earlier to 10.4 months in 2023–24.
The Commission found that land-use controls and coordination of housing-enabling infrastructure are particularly important areas for reform. It also identified complex approval processes and poor coordination between agencies and infrastructure providers as barriers to delivering new housing.
The Commission’s findings are important because they shift some of the discussion away from simply asking how many people need housing to also asking:
Why is Australia finding it difficult to build enough housing, in the right locations, quickly enough and at an affordable cost?
That is a supply and productivity question as much as it is a population question.
My overall view
I am not arguing that migration has no relationship with housing demand. Clearly, population growth—including migration—creates additional demand for housing.
My argument is that migration should not be treated as a substitute explanation for Australia’s deeper structural housing problems.
The evidence points towards several interacting factors:
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population growth and migration;
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insufficient housing supply in high-demand locations;
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planning and land-use restrictions;
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infrastructure and approval delays;
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declining construction productivity;
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accumulated property wealth and equity;
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cash purchasing;
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credit availability and lending practices; and
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weaknesses in the mortgage-lending system.
Therefore, I believe Australia needs coordinated housing, migration, infrastructure, planning and economic policy, rather than addressing each issue in isolation.
In particular, I think the Federal Government should have a much clearer mechanism for coordinating expected population growth with housing supply, infrastructure investment and the capacity of the construction industry.
I have attached reports and supporting material for reference.
References
https://www.abs.gov.au/census/find-census-data/quickstats/2021/2GMEL
https://www.pexa-group.com/content-hub/property-insights-and-reports/fy24-cash-purchases-report/
