New data reveals the significant impact of immigration on Australian house prices, with experts highlighting the acute effects on the rental market. A recent study by the independent property research group FoundIt suggests that reducing migration to pre-pandemic levels could provide immediate relief for renters and first-time home buyers. The research indicates that cutting migration by approximately 100,000 people would effectively curb the rapid price growth in the entry-level housing market without triggering a housing crash. FoundIt's modeling projects that aligning migration with building completions could reduce national home price growth by 2 to 3 percent annually. Consequently, Sydney prices, which were on track for a 2 percent gain this year, would decrease by about 1 percent, while Melbourne, Canberra, and Hobart prices would also drop. The study further emphasizes that the impact would be immediate, affecting these cities' housing markets. The housing demand remains high, and the supply has failed to keep up with population growth, as evidenced by the Institute of Public Affairs' analysis. According to the analysis, net permanent and long-term arrivals reached a record-breaking 480,520 in 2025, surpassing the previous record by 7 percent. Simultaneously, housing approvals fell annually by 15 percent in December 2025. This supply and demand imbalance contributed to a 7 percent increase in national dwelling prices, or nearly $80,000, over 2025. Kent Lardner, the head of research at FoundIt, criticizes the reckless disregard for the demand side of the equation by bureaucrats and politicians. He emphasizes that higher migration levels have driven up rents, which have, in turn, impacted the purchasing markets. Mr. Lardner argues that controlling migration demand is a straightforward solution to the housing crisis. The sub-$750,000 entry market, which is the most competitive in the country, would benefit significantly from easing migration, as first-home buyers and investors often compete in this segment. The calls for migration cuts are supported by the new Liberal leader, Angus Taylor, who has indicated that the Coalition will enforce stricter migration controls. Louis Christopher, the director of SQM Research, suggests that migration cuts could provide rental relief within six months. However, the Albanese government has faced criticism for the slow rate of new housing construction, with experts attributing the problem to political leadership rather than the migrants themselves. Dr. Kevin You, a senior fellow at the IPA, labels the government's National Housing Accord as one of the greatest policy failures in the past 25 years, emphasizing the direct link between migration-induced demand and rising rents and home prices.
