Coronavirus: Housing and construction ‘are doomed without migrants’

Property and construction lobbies are urging the Morrison government to allow migrants as soon as possible to save the struggling industry.

Property Council of Australia chief executive Ken Morrison says the wider sector would not recover in the near term without an influx of migrants.

Australia’s property and construction lobbies are urging the Morrison government to open the borders to international students and permanent migrants as soon as possible to save the struggling industry, as new home sales drop to their lowest levels since the 1991 recession.

Scott Morrison has warned that the nation faces an 85 per cent fall in net overseas migration next year, which threatens a property sector increasingly reliant on large accommodation complexes for students and investments made by their families.

Fears in the property sector over migration come as the Housing Industry Association reported a 23 per cent drop in new home sales since the coronavirus pandemic­ struck and an expected 50 per cent contraction in new home builds in the second half of the year.

Property Council of Australia chief executive Ken Morrison told The Australian student accom­modation underpinned several markets and the wider sector would not recover in the near term without an influx of migrants.

“There is no reason why we couldn’t transition — dependent on the health advice — towards a resumption in net overseas ­migration and a resumption in ­offshore student visas,” he said.

“You have student accommodation which is directly reliant on offshore student visas and then often the families will buy a unit or an apartment here for the stud­ent. That leads to other investments in property.

“A transition back into normal migration growth that’s safe for Australians will be key. It will be very hard to recover in the near term without it.”

While COVID-19 restrictions have not stopped construction in recent weeks, the sector fears that construction projects — especially ones for student accommodation — will dry up in the second half of the year, leading to the loss of hundreds­ of thousands of jobs.

 

Student accommodation has helped power property booms in the CBDs of state capitals for more than a decade, with industry sources particularly concerned about what a drop in foreign students will do to markets in Melbourne, Canberra and Hobart.

Master Builders Australia chief executive Denita Wawn said any extended slowdown in population growth into next year would ultim­ately harm both residential and commercial builds. “Obviously it must be done in a structured, safe way — but the sooner we have lifting of those border closures, the better,” Ms Wawn said. “There is a huge flow from population growth through to property.

“I don’t think a lot of people real­ise the problems short-term and long-term population chang­es can cause. If your population stays static, you will see a significant downturn in building and con­struction, and that will cost jobs.”

The HIA survey of the 100 biggest home builders in the country has found property consumers are already cancelling sales at a rate four times higher than during the 2008-09 global financial crisis.