International migration and the growth of households in Sydney

The focus of attention on the current housing bubble has led to calls for a cut to Australia’s international migration intake as a solution to the problem. Beyond the short-term, there have also been calls to cut international migration or to direct it away from Sydney as a means of relieving Sydney’s ‘population problem’. This paper provides the results of a new method for projecting households at a regional level in Australia. The projections are applied to Sydney over the period 2001-2016 and make use of five varying scenarios related to future migration levels. The conclusion is drawn that reasonable variations in future levels of migration have almost no effect on the number of households in the first five years (to 2006), very little effect in the first 15 years (to 2016) and some effect over a 30 year period. Thus, immigration policy is an extremely blunt instrument to apply to a short-term, housing bubble. Even in the longer term, reasonable variations in immigration policy would have only a relatively small impact on reducing the growth of households in Sydney. Future growth of the number of households in Sydney is driven primarily by the unstoppable ageing of its population. Thus, Sydney does not have a population problem so much as a planning problem