Migration surge strains Australian housing as supply lags behind

(AUSTRALIA) Australia’s net migration is running at record speed, colliding with a housing market that cannot keep up. In the 12 months to May 2025, the nation recorded 447,620 net permanent and long‑term arrivals, a level that officials describe as unprecedented in modern times. Monthly data shows May 2025 arrivals alone hit 33,230, the highest May on record and 6% above the previous peak.

If current trends hold through the end of the year, projections indicate annual net arrivals could climb toward 598,000 by December 2025, far above the federal budget forecast of 335,000 for FY25. The result is a sharper housing crisis that is worsening affordability, squeezing renters, and stretching social housing and homelessness services across the country.

Supply shortfalls and visible impacts

Government briefings and council reports point to the same core problem: even with strong intentions, housing supply is not meeting demand.

• In 2024, Australia completed about 177,000 dwellings, but after demolitions the net new supply was closer to 155,000.
• Estimated underlying demand was 223,000 new dwellings—leaving a gap of about 68,000 homes in 2024.

That gap shows up as rent spikes, longer queues at open inspections, and growing waitlists for public housing. The National Housing Accord targets building 1.2 million homes between 2024 and 2029, but Treasury and the National Housing Supply and Affordability Council (NHSAC) confirm the target will not be met.

• Forecast completions over the period: roughly 938,000 → implying a shortfall of about 262,000 homes.
• NHSAC: Australia’s housing system is “not meeting the goal,” describing supply as “one of the least responsive” in the world.

Critics trace the mismatch to surging net migration beyond expectations and decades of underbuilding and slow approvals.

Migration vs. budget settings

Budget numbers underline the mismatch between planning and reality.

• Federal net overseas migration setting for FY25: 335,000.
• By May, the tally had already exceeded that by 88,990—an overshoot of 27% with one month of data still to come.

The faster pace has amplified calls from economists and housing advocates to better align migration policy with construction capacity. Analysis by VisaVerge.com finds the current intake is outstripping supply growth in ways last seen during earlier construction downturns, magnifying shortfalls in already tight rental markets.

“Without faster supply, high net migration will keep rents and prices elevated,” warn economists. The longer stock additions lag arrivals, the more pressure builds on low‑income renters and prospective first‑home buyers.

Who’s feeling the squeeze

For families, students, and renters arriving this year, the gap means harder choices and higher costs.

• NHSAC data: more than half of lower‑income renters were in rental stress in 2023; 60% experienced multi‑year stress. (Rental stress = spending over 30% of income on housing.)
• 169,000 households are on public housing waitlists—near record levels.
• About 280,000 people accessed homelessness services; nearly 38,000 experienced persistent homelessness.

These are lived realities—crowded share houses, extended stays with relatives, and older renters unable to secure stable leases.

Acute timing: 2024–2026

NHSAC and Treasury highlight the most acute imbalance is concentrated in 2024–2026, when completions are forecast to lag badly behind demand.

• Median time to save a home deposit: 10.6 years
• Dwelling price‑to‑income ratio: about 8.0
• Macro context: negative per‑capita economic growth in 9 of the last 11 quarters, meaning average living standards have struggled even when headline GDP rose with population growth.

Migration advocates note cutting arrivals is a blunt instrument that doesn’t fix planning gridlock, slow land release, and high construction costs. The Australia Institute and other groups argue the deeper causes are these structural barriers.

Government response and critics

The federal government emphasizes a high intake to support skills and post‑pandemic recovery and points to investments in social and affordable housing.

• Accord targets cited by ministers: 55,000 additional social and affordable homes federally, plus at least 25,000 from states and territories.

Critics counter that given the scale of recent arrivals and approval backlogs, the timing gap leaves renters and first‑home buyers with the worst impacts. The NHSAC and Treasury both say the Accord target won’t be met, raising urgency for faster delivery.

The month that focused attention: May 2025

• May 2025 arrivals: 33,230 — highest May on record, 6% above previous May record.
• Year to May 2025 net arrivals: 245,890 — highest for that period.
• Most newcomers head to major city job markets, where vacancy rates are near historical lows and planning complexity slows new supply.

Regional areas have absorbed some growth, but big cities remain the primary pressure points.

Political and public debate

Voices across the spectrum agree the pipeline is too slow, but they clash on causes and solutions.

• Daniel Wild (Institute of Public Affairs) described inflows as “out‑of‑control migration intakes,” blaming slow delivery of housing and warning of economic impacts.
• Jack Posobiec (Human Events/Sky News commentator) linked mass migration to social tension and fastest population growth outside Africa.
• Government rejects claims that migration is the root cause, pointing to record housing investment and workforce needs in health, construction, and education.

Renters—especially lower‑income and First Nations households—carry the heaviest load, with higher eviction risk and prolonged stays in crisis accommodation. Many expected household formations (young adults leaving home, couples moving out) are being delayed, increasing hidden overcrowding even as measured demand is suppressed.

Construction sector constraints

Builders and developers face multiple headwinds:

• Higher borrowing costs and price volatility for materials and labor.
• Financing and capacity constraints can stall projects even when approvals are faster.
• Pre‑sales targets are harder to meet when buyers are stretched.
• Community resistance often slows up‑zoning needed for affordable apartments.

Governments have pushed planning streamlining and density near transport hubs, but approvals and infrastructure funding still lag population growth.

Pressure points summary (key data 2024–2025)

• Net permanent and long‑term arrivals in May 2025: 33,230 (highest May, +6%).
• Net arrivals year to May 2025: 245,890 (record).
• Net arrivals in 12 months to May 2025: 447,620 (second highest ever).
• FY25 budget forecast: 335,000; exceeded by 88,990 (27%) by May.
• Projected annual net arrivals if pace continues: up to 598,000 by Dec 2025.
• Housing supply (2024): 177,000 completed; 155,000 net after demolitions.
• Underlying demand (2024): 223,000 dwellings → 68,000 shortfall.
• Housing Accord target (2024–2029): 1.2 million homes; forecast 938,000 → 262,000 shortfall.
• Public housing waitlists: 169,000 households.
• Homelessness services: 280,000 clients; persistent homelessness ~38,000.
• Affordability (2024): 50% of median household income for new mortgage repayments; 33% for rent.
• Macro: negative per‑capita growth in 9 of last 11 quarters.

Practical implications for newcomers and renters

New arrivals report crowded inspections, fierce lease competition, and higher documentation/bond requirements. Community groups recommend:

• Be prepared with complete application packs (references, proof of income).
• Expand search radius to suburbs with better vacancy rates.
• Beware of rental scams in tight markets.

Commonwealth Rent Assistance helps many (over 1.3 million people in 2023–24), and 43,800 households used the Home Guarantee Scheme to buy with smaller deposits. Still, advocates say these supports don’t solve the core supply gap when vacancy rates are very low.

Policy options experts highlight

There is no single fix, but a package of measures could ease pressure:

1. Faster approvals for medium‑density housing near transport.
2. Incentives for build‑to‑rent with strong tenant protections.
3. Scaled‑up public and community housing to tackle the backlog.
4. Closer coordination of migration intakes with student housing and worker accommodation pipelines.

These steps require federal, state, and local cooperation plus industry and community buy‑in.

Warning: time is the enemy. Each high‑arrival month adds pressure that rental markets cannot easily absorb. Cutting arrivals too sharply risks workforce and university disruption; doing nothing risks deeper, long‑lasting affordability problems.

Data sources and where to follow updates

Official migration data come from the Australian Bureau of Statistics’ Overseas Arrivals and Departures series. Readers can review the latest series here: Australian Bureau of Statistics – Overseas Arrivals and Departures.

These figures inform budget settings, university planning, and infrastructure forecasts—and are central to the housing debate, because arrivals signal near‑term population growth while approvals and completions respond on a lag.

Outlook and stakes

If net migration remains high and completions don’t rise quickly, the shortfall will widen and affordability will deteriorate further. If approvals and construction accelerate by late 2026, pressure could ease.

The stakes are not only economic. Stable housing supports health, education, and community life. Current data—447,620 net arrivals in the 12 months to May 2025 and the potential for 598,000 by year’s end—are more than statistics; they are pressure on real lives, felt in rising rents, harder searches, and postponed plans.

In a country built on migration, the debate is not whether to welcome people—it is whether the system can build enough homes, in the right places, at the right times. The answer today is: not yet. VisaVerge.com and specialists argue that policy adjustments and faster building are both needed to close the gap. Without them, each new month of high arrivals risks deepening the shortage and entrenching inequality between secure homeowners and unstable renters.