Society/Culture Why Australia needs to lower its immigration intake

[Gethelred]

This thread is about a lot of things, but one of the things it is not about is crime.

The next person who seeks to make a connection between violent crime and immigration by posting about it in here will receive a threadban and an infraction equivalent to the racism it portrays.

Should you want to talk about violent crime, the 'African gangs' thread is both thataway:

Vic - Melbourne's Sudanese gangs

The Victorian government and police management have finally been shamed into admitting there's a problems with African gangs. On 20th December, after eight police were overpowered by a gang of 100 mainly South Sudanese youths who trashed a Werribee Airbnb-rented property, smashing car...

www.bigfooty.com

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Let's stay on topic from here.

 

[peetoo]

It’s not zero empty homes either.

Analysis | No, Max, we don’t really have a million vacant houses — The Age

The Greens housing spokesman says the empty homes recorded in the census means supply isn’t the cause of the housing crisis. The reality is quite different.

apple.news

In the case of apartments, it’s poor build meaning unfit for use

Land banking seems a poor excuse

 

[peetoo]

Relaxing planning won't stop developers land banking

The YIMBY movement claims that if Australia simply relaxed zoning and planning rules and let developers build apartments wherever they wanted, Australia’s housing crisis would magically resolve. Their argument was demolished by an article published this month in the Daily Telegraph, which...

www.macrobusiness.com.au

 

[peetoo]

Are property investors the new poor?

No doubt there’s some core wealth there, but there’s a food chain, but low down the tax relief is the placebo for a waste

Buy a principle residence with the most value and invest the rest in smsf or something

The ‘better way’ to build wealth than property investing

Speculating on residential real estate is a national sport but Koda Capital financial adviser Sebastian Ferrando sticks his neck out to argue that it’s a wealth trap.

www.afr.com

 

[Seeds]

My position on the rate of immigration is crystal clear.

The current rate is smashing living standards and benefiting no one but the big end of town.

It needs to be cut back to the long term average of 70 k per a year.

I cannot be any clearer.

And like most people you would be wrong.

Both parties support high immigration because they know it improves the standard of living for the majority of existing residents.

High immigration provides most of the workers in the low skilled service jobs that locals do not want to do. Without high immigration inflation would be much higher.

Given we mostly bring in immigrants of working age, immigration dramatically helps lower our dependency ratio which boosts our government budget. I.e. without high immigration we would have a combination of lower government services and higher taxes.

Higher immigration also boosts the returns to business owners by providing more markets.

High immigration does not boost house prices. Lack of land releases, regulations around buiilding codes, increased material costs and rising construction worker costs boosts house prices. I.e. in the medium to long term rising housing prices are solely about costs and have nothing to do with demand. We could have zero immigration and still suffer rising house prices if governments didnt release enough land. In fact high immigration actually helps lower construction worker costs because a higher proportion of immigrants are workers. The only time high immigration would boost house prices is if there was a lack of land in this country to build houses. I.e. if we were Singapore. But australia is one of the emptiest countries on the planet. We do not lack land. Thus demand has no influence.

 

[burge13]

High immigration does not boost house prices. Lack of land releases, regulations around buiilding codes, increased material costs and rising construction worker costs boosts house prices. I.e. in the medium to long term rising housing prices are solely about costs and have nothing to do with demand. We could have zero immigration and still suffer rising house prices if governments didnt release enough land. In fact high immigration actually helps lower construction worker costs because a higher proportion of immigrants are workers. The only time high immigration would boost house prices is if there was a lack of land in this country to build houses. I.e. if we were Singapore. But australia is one of the emptiest countries on the planet. We do not lack land. Thus demand has no influence.

Of course it does. The other things you mention do as well but we've brought in about a million people in short time, they need to stay somewhere. To say it 'does not boost prices' is just simply wrong. More people wanting to buy does exactly that

There are absolutely positives to immigration but ours is way too high currently.

The reason they bring so many in is to protect house prices which is our greatest investment scheme. They need to keep that ponzi rolling

 

[Seeds]

Of course it does. The other things you mention do as well but we've brought in about a million people in short time, they need to stay somewhere. To say it 'does not boost prices' is just simply wrong. More people wanting to buy does exactly that

There are absolutely positives to immigration but ours is way too high currently.

The reason they bring so many in is to protect house prices which is our greatest investment scheme. They need to keep that ponzi rolling

You are missing my point. Land can be released to deal with any immigration rate. And The immigrants provide more then their share of construction workers to build new homes.

The reason for high house prices is lack of land releases. Governments are pushing up house prices. Not immigrants. Remove the land supply constraints we artificially impose on ourselves and immigrants lower housing prices because they provide a bigger pool of construction workers.

Why did the biggest rise in house prices occur in 2020-2022 when immigration was at near zero levels?

 

[burge13]

You are missing my point. Land can be released to deal with any immigration rate. And The immigrants provide more then their share of construction workers to build new homes.

The reason for high house prices is lack of land releases. Governments are pushing up house prices. Not immigrants. Remove the land supply constraints we artificially impose on ourselves and immigrants lower housing prices because they provide a bigger pool of construction workers.

Why did the biggest rise in house prices occur in 2020-2022 when immigration was at near zero levels?

Last year is when it seemed to grow out of control more than 2020
Rates at their lowest point helped also.

They could absolutely release more land, that's a contributing factor as well. Probably the largest factor

We don't have anywhere near enough builders either though. From what I hear through tradie mates anyway, I'm not in the game to know.

To claim that nearly 1m new arrivals has no impact on house/rental prices is just lunacy though. Drives up demand, what a silly thing to ignore or claim has no affect

 

[Seeds]

Last year is when it seemed to grow out of control more than 2020
Rates at their lowest point helped also.

They could absolutely release more land, that's a contributing factor as well. Probably the largest factor

We don't have anywhere near enough builders either though. From what I hear through tradie mates anyway, I'm not in the game to know.

To claim that nearly 1m new arrivals has no impact on house/rental prices is just lunacy though. Drives up demand, what a silly thing to ignore or claim has no affect

You need to differentiate short run vs long run dynamics. In the short run supply is fixed so any demand growth boosts prices. But in the long run supply is fully flexible so demand has zero impact on prices unless supply is permanently constrained. It's not permanently constrained in Australia.

The 1 million arrivals could be dealt with if the government planned properly and released enough land. The government didn't. We should be putting all blame on government land release and housing regulatory policies.

In the end it's always costs that drive prices, not demand. And given immigrants tend to be more weighted to working age then dependents and more weighted to doing lower skilled jobs like construction, then immigrants lower construction costs and thus contribute to lower housing prices in the long run.

In the end it's only the long run that matters.

 

[sdfc]

You need to differentiate short run vs long run dynamics. In the short run supply is fixed so any demand growth boosts prices. But in the long run supply is fully flexible so demand has zero impact on prices unless supply is permanently constrained. It's not permanently constrained in Australia.

The 1 million arrivals could be dealt with if the government planned properly and released enough land. The government didn't. We should be putting all blame on government land release and housing regulatory policies.

In the end it's always costs that drive prices, not demand. And given immigrants tend to be more weighted to working age then dependents and more weighted to doing lower skilled jobs like construction then immigrants lower construction costs and thus contribute to lower housing prices in the long run.

In the end it's only the long run that matters.

In the long run we're all dead.

 

[btdg]

You need to differentiate short run vs long run dynamics. In the short run supply is fixed so any demand growth boosts prices. But in the long run supply is fully flexible so demand has zero impact on prices unless supply is permanently constrained. It's not permanently constrained in Australia.

The 1 million arrivals could be dealt with if the government planned properly and released enough land. The government didn't. We should be putting all blame on government land release and housing regulatory policies.

In the end it's always costs that drive prices, not demand. And given immigrants tend to be more weighted to working age then dependents and more weighted to doing lower skilled jobs like construction then immigrants lower construction costs and thus contribute to lower housing prices in the long run.

In the end it's only the long run that matters.

In the long run, supply is more elastic, but it isn't perfectly elastic. There are still boundaries and constraints in any practical long-run scenario. In the housing market, even if you removed ALL legislation and created a total free for all, there would still be a limit on the amount of land close to the city, and some land is easier to build on that other areas, and resource costs will still have increasing marginal costs...

As a result, demand will still drive prices in individual markets.

Prices are also quite sticky, particularly on the downside in the housing market. If there's a short term bump created by migration, prices are likely to stay there - no want wants to sell at a loss. The big problem in the housing market isn't the growth in house prices, necessarily. It's the current high (and for many, inaccessible) price level.

And we are never going to get a solution that reduces prices. About the only solution I can see is a generational set of policies aimed at keeping prices stable, combined with policies that increase wages (so the relative price of housing drops, slowly, over time).

Ridiculously high immigration rates are the exact opposite of this. I'm a pro-immigration, card carrying lefty of the highest order but the current numbers of immigrants (1m per year) are absurdly unsustainable. It's an anti-worker policy aimed at preventing wage growth that is creating significant problems in the housing market, but also issues around infrastructure and a host of other things...

 

[Seeds]

In the long run we're all dead.

I really dislike this line as it fails to take in the past and present.

The world we live in today is the product of both the short run implications of the last three years of policies and the long run implications of the last couple of thousand years of policies.

When you phrase it this way you see how much more important long run implications are then short run.

 

[Seeds]

In the long run, supply is more elastic, but it isn't perfectly elastic. There are still boundaries and constraints in any practical long-run scenario. In the housing market, even if you removed ALL legislation and created a total free for all, there would still be a limit on the amount of land close to the city, and some land is easier to build on that other areas, and resource costs will still have increasing marginal costs...

As a result, demand will still drive prices in individual markets.

Prices are also quite sticky, particularly on the downside in the housing market. If there's a short term bump created by migration, prices are likely to stay there - no want wants to sell at a loss. The big problem in the housing market isn't the growth in house prices, necessarily. It's the current high (and for many, inaccessible) price level.

And we are never going to get a solution that reduces prices. About the only solution I can see is a generational set of policies aimed at keeping prices stable, combined with policies that increase wages (so the relative price of housing drops, slowly, over time).

Ridiculously high immigration rates are the exact opposite of this. I'm a pro-immigration, card carrying lefty of the highest order but the current numbers of immigrants (1m per year) are absurdly unsustainable. It's an anti-worker policy aimed at preventing wage growth that is creating significant problems in the housing market, but also issues around infrastructure and a host of other things...

Cities expand out and up and new ones start up resulting in their never to be constraints on living in or near cities. The exception is Singapore and even they are building up and expanding their land into the ocean.

Demand does not drive house prices beyond the short run At all. If it did new zealand and australia would have the cheapest house prices on the planet because we are the least populated countries. Yet we are some of the most expensive. Your understanding of housing economics is incorrect.

What does policies keeping prices stable mean? Keeping prices stable is a potential outcome of policies. Not a policy itself. And wages growth in construction drives up house prices. Not lowers them.

Lowering house prices is completely achievable. Release significantly more land, remove negative gearing, reduce housing regulation to enable cheaper builds, increase immigration of potential construction workers (to lower construction wages, not boost them), remove the 100 percent capital gains discount for home owners and remove the 50 percent capital gains discount for landowners, put homes in the asset pension test (to encourage empty nesters to downsize and leave the inner city) and replace stamp with land taxes.

 

[sdfc]

I really dislike this line as it fails to take in the past and present.

The world we live in today is the product of both the short run implications of the last three years of policies and the long run implications of the last couple of thousand years of policies.

When you phrase it this way you see how much more important long run implications are then short run.

It was really just a flippant comment inspired by your picture.

But while we're here. Keynes was correct. Discussing the long run is pointless when the problems are here and now. The problems in the housing sector aren't caused by an oversupply of public housing.