We need migrants and new rules to boost housing, property conference told

Australian property industry experts have told a national conference that Australia will damage its international standing if it makes it harder for foreigners to invest here.

Property industry leaders say rules that make it easier for foreign investment in property along with a boost to immigration are crucial for fixing the housing crisis in Australia.

An increase in immigration was needed to tackle continued labour shortages within the construction sector and ensure more properties could be completed, they said.

Industry leaders also told the Property Council of Australia’s Property Congress in Townsville that tax settings in Victoria and NSW were preventing foreign capital from being deployed to fund new developments.

Scape co-founder and chief executive Craig Carracher said bad policy and aggressive cuts to immigration would haunt Australia in the future, adding that the education industry needed to attract more talent to enable the country to lift productivity.

“We need the right immigration that supports Australia to achieve what we’re endeavouring to achieve as a country,” he said.

“To me, one thing that drives productivity is education, whether that’s traineeships or university research. Anything that restricts our national agenda on education that’s driven by immigration is a bad policy and will come back to haunt us in the future.”

Scape co-founder Craig Carracher says international students help to tackle poor productivity. Picture: Jane Dempster

Scape is one of the country’s largest providers of student housing, which relies heavily on demand from international stu­dents. Government data shows that in the year to July 2024, there were 943,977 international student enrolments, a 17 per cent increase on the same period in 2019.

ISPT head of property Amanda Steele said that immigration was good for Australia, but it needed to increase in areas where there were skills gaps, such as in construction. Analysis from BuildSkills Australia showed that the government would need 90,000 more workers in the sector to meet an ambitious plan to build 1.2 million homes in five years.

“When you look at the fact that we have skilled construction workers coming in, but they’re often in suits, not shorts … we need those skilled construction workers that will work on site, not just sit behind a desk,” Ms Steele said.

Federal Housing Minister Clare O’Neil said in a video message to the conference that the Labor government had issued 10,000 skilled construction worker visas in the past year, which was the highest in the past decade.

Foreign investors have been attracted to Australia because of population growth and the fact that real estate was seen as safe, Ms Steele said.

ISPT head of property Amanda Steele.

Ms Steele said Australia was the most desired market in the Asia-Pacific for foreign property investment.

Property Council president and Charter Hall Office CEO, Carmel Hourigan, said sustained population growth was required to drive capital into the country.

She said international investors were concerned about the increasing volume of tax changes, particularly in Victoria and other eastern states.

“Why are we taxing foreign investors who have been at the heart of some of the largest infrastructure real estate players and give liquidity to us?” she asked.

“People are starting to worry that tax changes happen so often, without being discussed.”

Ms Steele said tax changes were sporadic and irrational, noting that a per cent increase in NSW land tax was significant and made foreign investors nervous.

“International investors are nervous about that, and they’re very savvy around certain states, where they’re worse,” she said.

“I’ve been told by very senior government officials that foreign capital doesn’t vote. That’s not going to help us, that’s going to limit our productivity, and it needs to be addressed.”

The Victorian government this year increased the absentee owner surcharge (also known as the foreign owner surcharge) from 2 to 4 per cent from in a bid to discourage under-utilised property. It applies to absentee individuals, corporations or trusts that own property in Victoria but reside or operate primarily outside of Australia.

Mr Carracher, who is an outspoken critic of the Victorian government, told delegates that his company would not invest in the state unless it was changed, saying that a retrospective tax on ­property ownership was a bad precedent.

“We won’t invest in Victoria as long as the Victorian government does a retrospective tax in their systems on property ownership based on the racial character or foreign character of the investor.”

He added that current settings were delaying the much needed deployment of capital, particularly around the build-to-rent sector. “This is where government, big government, can have a negative impact,” he said. “They could instead have a positive impact, and offer supply side incentives rather than a demand side stopper of stopping immigration.”

The reporter travelled to Townsville as a guest of the Property Council of Australia.

Originally published as We need migrants and new rules to boost housing, property conference told