Housing: it comes down to supply and demand

November 20, 2025

https://johnmenadue.com/post/2025/11/migration-myths/?utm_source=Pearls+%26+Irritations&utm_campaign=2140ca9104-Daily&utm_medium=email&utm_term=0_0c6b037ecb-2140ca9104-645461111

Sorry Ian McAuley, when it comes to housing it’s basically a question of supply and demand. And most of the demand comes from population growth, of which net overseas migration (NOM) makes up three quarters (315,900 of 423,400 people in the year ending March 2025). Natural increase should be coming down because of below replacement fertility (TFR is currently 1.5 births per woman). However, because of the influx of young adult migrants, natural increase remains above 100,000 annually.

So, the main way to reduce demand is to get NOM down to a point at which it is in balance with supply of new infrastructure and services. The recent slight decline has helped but there is still a huge backlog of housing that must be addressed. So, NOM needs to come down still further until every new and old Australian is housed properly.

It’s not the whole story of course. There is energy and environment. Growing human populations encroach on the habitats of other species, including the koala. They make it more difficult to reach our greenhouse emission reduction targets. Feeding ever more people often means cutting down forests for pasture or cropland.

At some point we have to stop growing.