According to financial guru Alan Kohler, excessive immigration is the cause of Australia’s housing crisis, a crisis that is being further fueled by the influx of international university students.
Kohler, the ABC’s financial expert, said it was not permanent migration of workers that was the main driver of rising demand for housing, and rising prices, but the growing number of foreign students.
“Most of the migration flow to Australia has been outsourced to universities and colleges, which see newcomers as customers rather than migrants,” he wrote in an article for The new daily.
‘They (universities) use ‘educational agents’ in other countries to recruit them, and pay sales commissions to entice them.’
Kohler saw the agents as “a bit like legitimate human traffickers”: eager to get their cut, but not interested in the negative consequences.
Kohler said it was the immigration policy changes in 2001 under the Howard government that “changed Australia forever”.
The changes have made it much easier for students from countries such as India, China and Pakistan to enter the country and obtain permanent residency, compared with before, when it was “almost impossible”, Mr Kohler said.
According to Kohler, the changes saw the number of migrants in Australia, including students, triple between 2005 and 2008 to 300,000 a year.
According to financial guru Alan Kohler, excessive immigration is the cause of Australia’s housing crisis, which is only being fueled by the influx of international university students.
The Albanian government plans to cap the number of international students admitted to universities.
The proposal has been met with strong opposition from higher education providers, who have become increasingly reliant on fees paid upfront by foreign students, rather than fees paid by local students through HECS.
The ceiling could rise if colleges were to fund student housing, reducing fierce competition for properties in the broader rental market, given that major Australian cities have an extremely low vacancy rate of 1.3 percent.
Any decline in international student numbers would have a significant impact on universities’ revenue streams, with knock-on effects on the funding available for research projects.
“The current Labor government’s position is that universities have become addicted to foreign students and they should not base Australia’s population growth on their desire for revenue,” Kohler explained.
‘Moreover, universities really need the money now that the government has no more money available. Without foreign students, research would dry up and the national scientific effort would suffer.’
The imbalances created by the explosive population growth are not only noticeable in the rental market and in house prices, but also in the shortage of labor, especially in the construction sector.
This has caused prices for skilled workers to soar, which in turn has led to the demise of a record number of construction companies and further housing shortages.
The Albanian government’s target of building 1.2 million new homes by 2029 was predicted to be missed almost from the moment it was announced. The target is already behind schedule.
The target is to build 240,000 homes each year, but that number is currently only 150,000.
The government also hopes to reduce net migration abroad to 260,000 in this budget year, from 547,300 in 2023.
“It will not be easy to reduce Australia’s population growth to a level that approaches the actual capacity of the construction industry to build homes for everyone – contrary to what the government would like it to be –,” Kohler said.
An Australian with an average full-time salary of $100,017 can buy a house for only $650,110 with a 20 per cent deposit of $130,022. Banks can only lend someone 5.2 times their pre-tax salary.
This person would run into mortgage problems if they bought an average home in Melbourne or Brisbane and paid $3,353 in mortgage payments every month – more than a third of their salary.
Someone renting a property in Sydney, where the average weekly rent is $694, pays almost $3,100 a month to a landlord.
Middle class housing in Australia’s major capital cities is unaffordable for the average Australian worker, meaning they are limited to apartments or a house with a small backyard in a remote suburb.
The government now plans to cap the number of international students admitted to universities (stock photo from University of New South Wales)