S1: I'm Shane Oliver, chief economist at AMP, says more migrants
S1: from overseas will push up demand for housing and keep
S1: runaway home prices out of reach for young Australians. Of course. So,
S1: Shane Oliver, I mean, it would be self-evident, would it not?
S2: It's it certainly is self-evident that you have more people
S2: in Australia. It's going to mean more demand for houses.
S2: So I don't think there's any surprise in that. I
S2: guess the surprise is that the numbers still remain very high.
S2: We used to have, say, 230,000 immigrants each year in Australia,
S2: whereas that numbers are currently running around 300,000 or just
S2: a bit above. And that obviously means strong ongoing demand
S2: for housing, particularly on the back of several years of
S2: immigration levels being much, much higher.
S1: And and would it be fair to say that if
S1: the government won't address that issue, then they're not serious
S1: about making housing more affordable for young Australians?
S2: Well, I can I think you'd debate whether they're serious
S2: or not. But the reality is that to seriously address
S2: housing affordability, you have to address the imbalance between the
S2: supply of housing on the one side and the demand
S2: for housing, which comes from high immigration levels. Uh, I
S2: think you have to do a mix of both. You
S2: have to get you have to get immigration levels back
S2: down to more sustainable levels, perhaps below the levels we
S2: had pre-COVID. And at the same time, you've got to
S2: make it easier to supply more homes. So to be
S2: serious about it, you've got to do both. I think
S2: fiddling with capital gains tax and negative gearing, those sorts
S2: of things may be appealing, but they don't solve the
S2: underlying problem of a chronic undersupply of housing in Australia.
S3: So Shane, what's your expectation with regard to so negative
S3: gearing is still allowed, but it's only allowed for new homes.
S3: So is your expectation that that will actually generate demand
S3: for the building of new homes.
S2: Well, that's the theory. But in reality, most estimates are
S2: and most analysis suggest that won't be the case, because
S2: the reality is you're still discouraging a group of people,
S2: investors in this case, from investing in the property market.
S2: And they account for a big chunk of new home
S2: supply to the market. Even Treasury or the government in
S2: the budget papers released Tuesday night. If you go to
S2: page 158, a budget paper, number one, they actually estimate
S2: that over the next ten years, that will be 35,000
S2: less homes built in Australia as a result of the
S2: changes to the tax system. So in reality, it won't
S2: boost housing supply. It will actually reduce it. I think
S2: that's why they've had to announce that other policy to
S2: to invest $2 billion in critical infrastructure for housing. But
S2: but the tax change itself is estimated to actually reduce
S2: the supply of housing, not increase it.
S1: Shane, always lovely to speak with you. Shane Oliver, chief
S1: economist at the AMP.