Generations at war over housing solutions
Perth’s Baby Boomers are the cohort least likely to be impacted by the housing crisis – but they are the generation most likely to pitch immigration cuts as a solution to price hikes.
When it comes to resolving the housing affordability crisis, demand-side solutions and supply-side solutions are both in the spotlight.
But a recent survey of Perth residents revealed a stark generational divide over the most effective way to improve housing access for residents in the long term.
Across all demographics, there was a clear consensus that the city was in the midst of a housing crisis. Nearly eight in 10 respondents stated that the housing market was unaffordable, while just one-quarter said that now is a good time to buy a home.
However, younger respondents demonstrated a clear preference for a supply-side solution to the city’s housing woes, while older respondents preferred curbing demand through immigration cuts.
Of Generation Z respondents, 57 per cent stated there should be more high-density housing in Perth, compared to just 36 per cent of Baby Boomers.
Meanwhile, 75 per cent of Baby Boomers stated that Perth should cut immigration targets until housing shortages ease. In contrast, just four in 10 Generation Z respondents said that immigration reductions would improve the housing crisis, with 41 per cent stating that skilled migrants would help ease housing costs by building the new homes Perth needs.
As well as being more sceptical of immigration cuts, young respondents were also more likely to state that racism was a problem in Perth, with 59 per cent of Generation Zs agreeing with this statement compared to just 43 per cent of Baby Boomers.
The findings come amid warnings that Australian leaders are treating overseas migrants as a scapegoat for housing affordability challenges, despite migration only recently overtaking construction rates.
With temporary migrants highly likely to live in a group household, the short-term impacts of reduced temporary migration on rent prices are forecast to be minor.
In fact, the Reserve Bank of Australia’s assistant governor, Sarah Hunter, stated that other demographic factors are having a significant impact on housing costs, noting that declining average household size – driven predominantly by Australia’s ageing population – is requiring an additional 1.2 million homes on top of historic levels.
Meanwhile, the Grattan Institute warned that cuts to migration could sabotage Australia’s long-term economic future in return for a small short-term gain.
Based on economic modelling, the institute found that cutting migration to 160,000 newcomers per year would reduce rents by 2.5 per cent over the next decade, but would cost Australia $211 billion in lost tax revenue over the next 30 years.
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