Australian Population Increase Will Destroy the Aussie Ideal of Home Ownership, By James Reed

Leith van Onselen over at the mighty Macrobusiness.com.au argues that Australia's projected population increase will significantly undermine the traditional ideal of home ownership, often referred to as the "Great Australian Dream." This ideal centers on the notion that owning a home—typically a detached house with a backyard—is an achievable and desirable milestone for most Australians. However,van Onselen, contends that rapid population growth, driven primarily by high levels of net overseas migration, is creating an imbalance between housing demand and supply that will make this dream increasingly unattainable for many.

The article highlights that the Australian government's forecasts, as outlined in the May 2024 federal budget and reinforced by the Treasury's Centre for Population projections, predict a population surge of 1.8 million people over the next five years. This translates to an annual increase of approximately 360,000 people, with most settling in major cities like Sydney, Melbourne, Brisbane, and Perth. Van Onselen argues that this rapid growth—far exceeding the government's initial migration estimates—will fuel an insatiable demand for housing that the country is ill-equipped to meet. For instance, net overseas migration reached 1.06 million over nine quarters to Q3 2024, more than double the 470,000 forecast in the Albanese government's first budget in October 2022. This influx is presented as a direct driver of housing scarcity, pushing up both rents and home prices.

A central pillar of the home ownership ideal is affordability, which the article suggests is being eroded by this population pressure. The author points out that Australia's housing construction has consistently failed to keep pace with demand. The government's target of building 1.2 million homes over five years (240,000 annually) is described as inadequate when compared to the actual need driven by population growth. In the year ending Q3 2024, only 177,700 homes were completed—62,300 short of the annual target. Meanwhile, the population grew by 552,000 in the year to Q2 2024, with 445,700 of that increase attributed to net overseas migration. This mismatch ensures that housing demand will continue to outstrip supply, making homes more expensive and less accessible to the average Australian.

The article emphasises that this dynamic disproportionately affects younger generations and first-time buyers, who are traditionally the torchbearers of the home ownership ideal. Rising home prices and rents—exacerbated by the influx of migrants competing for limited housing—make it harder to save for a deposit. The author cites the national dwelling value-to-income ratio hitting a record high of 8.0 in Q3 2024, up from a 20-year average of 6.7, as evidence of worsening affordability. For renters, the situation is equally dire, with rental vacancy rates collapsing and rents consuming a record share of household income. This financial strain traps many in a cycle of renting, delaying or altogether preventing their entry into home ownership.

Furthermore, the article critiques the government's response as insufficient and misdirected. While the Albanese administration touts its housing construction goals, the author argues that the projected population growth renders these efforts futile. Adding 1.8 million people in five years—equivalent to nearly a Canberra annually—will perpetuate a structural undersupply, keeping prices elevated. The piece also dismisses alternative solutions like high-rise apartments, noting that construction costs for such units are higher than for detached homes, and price increases needed to spur development (e.g., 15-30 percent per industry forecasts) would further erode affordability. This challenges the notion that densification can preserve the ownership ideal, suggesting instead that it forces Australians into smaller, less desirable living spaces—far from the traditional dream of a spacious family home.

The author ties this housing crisis to a broader cultural and economic shift, arguing that the ideal of home ownership as a symbol of stability and prosperity is being sacrificed to a policy of unchecked population growth via immigration. Public sentiment, as reflected in polls cited in related Macrobusiness articles (e.g., 67 percent of Australians favouring reduced migration to ease housing shortages), underscores a growing disconnect between government policy and the aspirations of ordinary citizens. The article concludes that without a significant reduction in net overseas migration—to align population growth with housing and infrastructure capacity—the dream of home ownership will remain out of reach for an increasing number of Australians, transforming it from a widely attainable goal into an elitist privilege.

In summary, the Macrobusiness article posits that Australia's population increase, driven by high immigration, will destroy the home ownership ideal by overwhelming housing supply, inflating prices, and pricing out younger and lower-income households. This relentless demand pressure, coupled with inadequate construction, is framed as a fundamental threat to the cultural and economic cornerstone of Australian life, potentially relegating the "Great Australian Dream" to a relic of the past.

One may wonder what it would take to get Australians to get active in protest against immigration?

https://www.macrobusiness.com.au/2025/03/population-forecasts-exacerbate-housing-crisis/

"The Albanese government's first budget, released in October 2022, forecasts net overseas migration of 470,000 over its first two financial years (2022-23 and 2023-24).

They delivered more than double this number, with 1,060,000 net migrants arriving over nine quarters to Q3 2024.

The May 2024 federal budget forecast net overseas migration of 260,000 for this financial year (2024-25).

Then December's Mid-Year Economic and Fiscal Update (MYEFO) upgraded the net migration forecast for 2024–25 by 80,000 to 340,000 (see below table).

Tuesday's federal budget left the NOM forecast largely unchanged, dropping this year's number by 5,000 to 335,000 but increasing the following year (2025-26) by the same amount to 260,000 (from 255,000 previously).

The NOM forecast for this financial year is around 20,000 higher than the record pre-pandemic level of 315,700 recorded in 2008.

The 2025 budget also forecasts strong population growth for the major jurisdictions over the next five years.

Over the five years to 2029, Australia's jurisdictions are projected to grow as follows:

• NSW: 486,000
• VIC: 544,000
• QLD: 412,000
• WA: 239,000
• SA: 72,000
• TAS: 10,000
• ACT: 32,000
• NT: 10,000
• Australia: 1,804,000

Adding 1.8 million people to Australia's population in only five years will ensure that housing demand continues to outrun supply, placing upward pressure on rents and prices.

How can Australia realistically hope to solve the housing shortage when it continues to pump large numbers of overseas migrants into the market every single year?"

Short answer: it cannot.