Brace yourself: new data suggests that immigration is shaping Australian house prices more than you might expect, especially in the rental market. And the verdict from researchers is stark: dialing back migration to pre-pandemic levels could bring immediate relief to renters and would-be first-home buyers without triggering a housing crash.
A study by independent property researchers FoundIt indicates that if migration were aligned with housing completions, it could trim national home price growth by about 2–3% per year. In practical terms, Sydney could see prices ease by around 1% this year, with Melbourne, Canberra and Hobart also cooling, while Brisbane, Adelaide and Perth would settle into a steadier 3–4% growth pace.
Crucially, the most acute pressure is in rental markets, where long queues for inspections and open-for-rent events have become commonplace. The underlying message from FoundIt is that demand, driven in large part by ongoing migration, is fuelling rents and, by extension, feeding into property prices in the entry-level segment.
The analysis argues that reducing migration to pre-Covid levels would compress growth in the housing market rather than causing a rapid, destabilising crash. In fact, rough calculations suggest removing about 100,000 people from the intake could ease price pressures without devastating consequences for supply.
The study also paints a picture of a broader supply-demand imbalance: despite population growth, housing approvals fell by about 15% in December 2025, according to Institute of Public Affairs data. Net permanent and long-term arrivals reached a record 480,520 in 2025, surpassing 2023’s peak and underscoring a mismatch between demand and new homes.
FoundIt’s Kent Lardner stressed that policymakers have tended to focus on supply while neglecting the demand side. He argues that migration is a controllable lever and that, if pulled, it could ease pressure in the most crowded price bands—particularly the sub-$750,000 entry market where first-home buyers with small deposits and prospective investors compete fiercely.
In practice, easing migration could translate into slower rents and a cooler entry-level market. In Sydney and Melbourne, where many new arrivals first settle, a reduction in intake could lift affordability and reduce bidding wars for limited starter homes.
Political voices are weighing in. Liberal leader Angus Taylor has signalled support for stricter migration controls, with hints at returning arrivals to pre-Covid levels. Some industry voices, like SQM Research’s Louis Christopher, suggest that such moves could yield rental relief within months, especially if implemented before 2028 when supply ambitions were already challenged.
Critics argue the debate shouldn’t fall into political blame. They contend the real issue is policy neglect of housing supply and demand dynamics, urging a balanced approach that considers both the effects of migration and the need for more homes.
Key questions to consider: Do we prioritize short-term rent relief or long-term housing supply expansion? Is it feasible to calibrate migration in a way that doesn’t dampen economic growth or deter immigration altogether? And what responsibilities do federal and state governments share to align population trends with a sustainable housing supply?
If you have thoughts on whether migration levels should be adjusted to balance affordability with growth, share your view in the comments.
