New data from the Australian Bureau of Statistics reveals that net overseas migration has outpaced housing construction in every Australian state since the Labor government took power, creating a significant housing shortfall. Over the past three and a half years, more than 1.4 million immigrants have arrived in Australia, while only 149,000 new homes were built in New South Wales during the same period, which has absorbed close to 450,000 migrants.
Most new arrivals have settled in Sydney, exacerbating an already tight housing market. SQM Research data shows Sydney's vacancy rate rose to 1.5% in May from 1.3% in April, with 10,820 properties available. Despite this increase, vacancy levels remain historically low, and rents have climbed 7.6% over the past year, averaging $1,154.51 per week for houses.
With an average household size of 2.5 people, the construction of new homes has accommodated approximately 375,000 residents, not accounting for natural population growth exceeding 110,000. This has resulted in an effective housing deficit capable of accommodating an additional 184,000 people.
The government asserts that migration numbers are now decreasing. Recent ABS data indicates net overseas migration has fallen to 301,000, a decrease of over 45% from its post-COVID peak in 2023. Annual migration dropped 9% year-on-year by December 2025, with arrivals in the first half of the current financial year totaling 145,000, falling short of the budget forecast of 295,000. This slowdown is attributed to a 10% decrease in temporary visa holders and international students, with student migration returning to pre-pandemic levels. Visitor migration has also declined due to stricter visa regulations.
Meanwhile, the Albanese government's National Housing Accord, which aimed to build 1.2 million homes by 2029, is now projected to fall short of its target. The National Housing Supply and Affordability Council's State of the Housing System 2026 report indicates that New South Wales is expected to deliver only 258,000 homes, 69% of its target of 376,000.
Opposition figures have criticized the government's housing and investment policies. Shadow Housing Minister Andrew Bragg has voiced concerns that changes to negative gearing and capital gains tax could deter housing investment. He argued for encouraging investment across the board, regardless of the investor's type, and accused the government of favoring large super funds over individual investors through a policy he described as a "bizarre" deal with the Greens.
Opposition Leader Angus Taylor has called for migration levels to be aligned with housing capacity to alleviate pressure on the property market. He suggested that migration should be linked to housing availability to prevent further strain on the market.