On Tuesday August 13, the Australian Institute of International Affairs Queensland was joined by Professor of Economics and Head of the Department of Accounting, Finance and Economics at Griffith University, Alberto Posso. Throughout his presentation, Professor Posso aimed to address the widely accepted rationale that assumes there is a correlation between international migration and rising house prices. Across the political landscape and news coverage, it remains the prevailing theory purported time and time again.

Speaking from his own perspective, Professor Posso mentioned that upon hearing certain news coverage, it felt as if the media was referring to himself. Originally from Ecuador, Professor Posso relocated to Australia to pursue further studies. He emphasised a personal fondness for Australia when talking about the country, particularly in reference to his home as well as the culture, sights and sounds since living here. Yet, despite having contributed to Australia in many ways and obtaining numerous achievements in the field of economics, as an immigrant, Professor Posso is branded as an antagonist surrounding rising house prices.

The offensive narrative that international immigrants are hiking up housing prices remains pervasive across the Australian political landscape and media discourses. According to Professor Posso, there are a number policies that actively support this supposed correlation. A patent example is the government reducing migration numbers by implementing controls in programs such as student visas, working visas and holiday visas. Even more so is the reduction of humanitarian visas from 20 000 to 13 750, all attempting to limit overall international immigrants from 190 000 to 185 000 by next financial year.

Unpacking whether or not the evidence supports such measures, Professor Posso explored this rationale using the basic laws of supply and demand. Professor Posso explained that the supply and demand of housing in Australia will not shift massively, another key fact “supply is expected to increase as the prices increase.” The government is basing the evidence of a positive correlation between overseas migration and the rising cost of living on the logic that a higher demand inevitably leads to higher prices. Therefore, restricting migration will equate to lower prices. Coupled with the fact that approximately 30 per cent of people living in Australia were born overseas and  an empirical rationale is created, designed to encourage voters that curbing international migration is in their interests. 

In stark contrast to the prevailing narrative, Professor Posso then sought  to debunk the government’s ’solution’ to rising house prices. Using data collected throughout the COVID-19 pandemic, in which international borders were closed, Professor Posso demonstrated that although fewer immigrants were entering the country due to border restrictions, house prices continued to increase. So, it seems, according to Professor Posso, that “the evidence doesn’t match the rhetoric”.

Instead, Professor Posso argued that, rather than focussing on demand, increasing the supply of housing could lower prices. And, rather than curb overseas migration, the state and federal governments could implement strategies to better address supply side issues within the Australian housing market. These include releasing under-utilised and vacant land, revising zoning regulations and encouraging developments closer to public transport to support sustainable urban living. Other explanations for the increase in house prices include negative gearing, which can limit the supply of available housing, specifically in the rental market. Rather than defaulting to problematic strategies, Professor Posso suggested phasing out negative gearing as another viable solution.

To conclude, Professor Posso reminded the audience of the benefits of keeping migrants in Australia. Those hailing from different cultures tend to start their own businesses, boosting employment and productivity by employing unique sets of skills and thinking. Yet rather than addressing supply-side issues affecting the housing market, immigrants remain easy scapegoats across the political landscape and news coverage. Rounding out his presentation, Professor Posso would appreciate a more well-informed conversation around these issues.

Edited by Benjamin Colter & Deborah Bouchez