Fresh migration data highlights growing strain on rental market
Australia has posted another record for long-term overseas arrivals, coinciding with mounting concerns over the nation’s ability to deliver enough new homes.
Australian Bureau of Statistics (ABS) data for May 2025 showed net permanent and long-term arrivals reached 33,230, a 6% increase on the previous May record set in 2023, according to analysis by the Institute of Public Affairs (IPA). Over the year to May, arrivals totalled 245,890, the highest annual figure on record. Many new arrivals were international students.
At the same time, Australia is falling well short of its ambitious housing targets. New home approvals are tracking nearly 60,000 below the annual benchmark set under the National Housing Accord, with the shortfall in the first 12 months of the five-year initiative raising concerns across the housing sector about the likelihood of meeting the federal government’s goal of 1.2 million new homes by 2029.
ABS figures show 168,981 homes were approved between July 1, 2024, and the end of May 2025. In total, 181,643 homes were approved in the 12 months to May – an increase on the previous year but still well below the 240,000 annual figure needed to stay on track.
These numbers differ from the ABS’s permanent migration intake, but analysts say they reflect mounting pressure on the housing sector, particularly rentals.
David Wild, IPA deputy executive director, described the current migration level as “excessive” and said it was “exacerbating the housing and rental crises being experienced by Australians and new migrants alike.”
“Migration has played a significant role in pummelling Australia’s economic productivity (and) creating extended periods of negative per capita economic growth,” Wild said.
“Despite the fact that the federal government has failed to deliver on a single target under its accord, it continues to ramp up migration intakes, at a time when the nation is simply not building the houses it needs to accommodate a rapidly rising population.
“Migration-induced demand injected into the housing market, combined with sluggish supply – due to red tape and competition from bloated government infrastructure projects – have created a perfect storm of too many new people and not enough new homes.”
PPD Real Estate economist Diaswait Mardiasmo said the latest arrivals data underscored the need to accelerate housing approvals. “Projects are taking quite a while to be approved, due to red tape and other factors, and still quite expensive to ensure that it comes out of the ground,” she said.
“These figures stress the need for more housing, and correct type of housing at that, to accommodate more people into the country.”
Mardiasmo noted that renters would feel the most impact. “Most international migrants who come to the country are likely to be renters – therefore this will put more stress on the rental market,” she said.
Wild emphasised that the challenge was about planning and capacity. “Australia is a tolerant and welcoming society,” he said. “However, migration intake must be properly planned.”
The IPA highlighted that the government’s forecast for net overseas migration in the 2024-25 financial year was 335,000, but claimed this had already been surpassed by nearly 89,000 arrivals, with another month of data yet to be reported.
Wild stressed the consequences would definitely be felt in the housing market. “Australians are already struggling with rapidly rising house prices and rents,” he said.
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