Housing Supply Truths

In the early nineties, when thin-rimmed glasses were making a comeback, property tycoon Harry Triguboff was making some eye-popping purchases.

The founder of Meriton apartments began purchasing rundown petrol stations and industrial wasteland next to noisy freeways.

His magnate mates thought he’d lost his marbles, but Triguboff saw things differently.

The real estate billionaire, who started out as a taxi driver, identified a massive cohort of people who didn’t want water views or grass beneath their feet.

They were first home buyers who wanted cheap, affordable, housing, regardless of the surroundings – as long as they had access to public transport and basic amenities.

Put simply, they just wanted a ‘box’ to live in and pay rent to the bank.

Triguboff’s read of the market was bang on and for the next three decades he continued building vertical villages all over Australia. Hence his nickname, ‘High-rise Harry’.

In recent years, the government has been at pains to point out we have a housing supply problem.

The truth is, Australia’s had a housing supply issue for decades. Every property developer and local council knows this. It’s nothing new.

However, supply side problems don’t exist without demand.

And it’s the demand side of the equation which the government refuses to acknowledge.

Specifically, immigration.

The problem is, no one dare mentions immigration for fear of being labelled a racist or a xenophobe.

So I’m going to say it, immigration is putting significant pressure on our housing and if it was managed more carefully it would certainly make a difference.

Here’s one example.

In 2021, the residential property market in China collapsed and despite all attempts by the Chinese government, they still can’t stimulate it.

Consequently, a great wall of Chinese investors saw the Australian property market as a safe haven to park their money.

And park it they did!

In 2023, Chinese investors were buying (on average) $8,000,000 worth of residential property in Australia…per day!

Back then, the median unit price in Australia was $692,862, which means Chinese investors were buying 11.5 units per day, or 4,214 units per year…and just as many sat empty.

Australia has since introduced a two-year ban (starting April 1, 2025) on foreign buyers purchasing established homes.

However, there are still loopholes (e.g., migrants who obtain citizenship can still buy).

In other words, the problem hasn’t been fixed, it’s been reworded.

But don’t get angry with the foreigners, it’s all our doing.

Last week, the Albanese Government accelerated its first-home buyer deposit guarantee.

This scheme allows first home buyers to purchase with just a 5% deposit, while the government guarantees up to 15% of the loan, enabling them to avoid lenders mortgage insurance (LMI).

Meaning, first-home buyers could save tens of thousands of dollars in LMI and shave years off the time it takes to save a deposit.

The package also includes a $10 billion investment to build up to 100,000 homes, exclusively for first home buyers.

Sounds impressive doesn’t it?

But there’s a problem…

In 2023, the federal government also introduced the Housing Australia Future Fund which was designed to finance the construction of 30,000 new social and affordable dwellings over the next five years.

Well guess what, as of March 2025, only 400 of those homes have been completed.

And now the government has promised another 100,000 homes in addition to the initial 30,000 it’s struggling to get out of the ground.

So what’s the solution?

The only fair and equitable way out of this mess is to match the number of new visas with new homes.

I.e. when construction levels increase, so do visas.

Immigration has always enriched Australia, but the issue is scale and timing.

When arrivals outpace construction, it becomes growth at all costs.

You can see it in our housing, hospitals, schools, and roads.

Australia’s housing crisis is more than a supply issue, it’s a demand problem.

Harry Triguboff could see it from the back seat of his taxi decades ago.

Have a great weekend!

Adam