Housing: you can't ignore the demand factor

December 10, 2025

Michael Keating, in arguing that our housing problem is about supply and not demand, writes that “Australian population growth has been no faster in the last six years than previously over the last several decades, so the pressure of demand for new dwellings is no higher than we were readily able to accommodate in the past.”

It may be true that the average population growth rate of the last six years is more or less in line with the average of the last three decades or more. However, because there is an ever-bigger base, the actual numbers grow, if not the percentage figures. For instance, growth in 1994 was 174,000; in 2004 it was 218,900; in 2014, 330,200; and in 2024, 423,400. Demand for housing has increased proportionately.

Of course, supply comes into it, but we don’t seem to be able to build more than 177,000 dwellings a year for various reasons. So, demand has to be kept in check. That means adjusting the only lever available, namely immigration. It needs to come down to a level where all new residents – both migrant and native-born – can be housed, as well as the homeless and rental-stressed.