Strip away the political heat and Australia's housing crisis looks less like a border problem and more like a planning and taxation failure that has been quietly compounding for two decades. New reporting by SBS News highlights a tension that economists have long flagged: the public conviction that migration is the primary culprit is widespread, but the research tells a more layered story.
Survey results published by Macquarie University researchers in late 2025 found that 32 per cent of Australians aged 18 to 34 believe immigration or population growth is the factor contributing most to the housing problem, a figure that rises to 39 per cent among those aged 35 to 64 and climbs further to 46 per cent for those 65 and older. The breadth of that sentiment spans generations and has real political weight.
Liberal leader Angus Taylor has said that "record immigration has added pressures to infrastructure, to services, to housing in this country." His remarks echo those of predecessor Peter Dutton, who long argued that high migration levels were deepening the crisis. Meanwhile, former Immigration Minister Clare O'Neil acknowledged the "very genuine and significant challenges" in providing affordable housing but argued those challenges were "not caused by migrants", but rather a long-term lack of "serious housing policy."
The numbers do reveal a genuine construction shortfall. Independent housing economist Cameron Kusher notes that over the 29 years to September 2024, Australia on average built one new home for every one net overseas migrant. But over the year to September 2024, that ratio had blown out to one home for every 2.1 migrants, and had been as bad as one home for every 3.2 migrants in September 2023. That gap is not trivial. Yet attributing the entire crisis to migration requires ignoring several inconvenient facts on the supply side.
The Grattan Institute's Brendan Coates has pointed out that "in every other decade up until, say, the early 2000s, we built vastly more homes than we needed just to meet population growth, and since the 2000s we haven't." That is a structural failure that predates the post-pandemic migration surge by many years.
Coates also highlights the role of shrinking household sizes, noting that average household occupancy fell from 2.55 people in late 2020 to 2.48 people a couple of years later, a seemingly modest shift that alone implies demand for an extra 275,000 homes just to house the existing population. To put that in perspective, construction on 220,265 dwellings was underway nationally in the September 2025 quarter, according to the Australian Bureau of Statistics. The maths is stark: demographic change within the existing population is itself generating housing demand that current construction cannot satisfy.
The Settlement Council of Australia has pointed to supply constraints including slow approval processes and zoning restrictions, alongside tax policies such as negative gearing and capital gains tax discounts, as key structural contributors to the crisis. These are policy levers governments have chosen not to pull firmly for years, across both sides of politics.
The Locked-Up Mansions Problem
One supply constraint that receives far less attention than migration is the role of stamp duty in freezing existing housing stock. As reported by 9News, Baby Boomer and Generation X households hold average real estate equity of $1.36 million and $1.45 million respectively, according to KPMG figures, yet many refuse to sell properties that are simply too large for their current needs. The reason is partly financial: the transaction costs of moving are punishing.
Reserve Bank Governor Michele Bullock has directly blamed state stamp duties for preventing older Australians from downsizing. "There's many older people whose families have left home who are still in their large homes and they're not downsizing," she said, describing stamp duty as "a tax on mobility."
The numbers bear that out. According to 9News, stamp duty on Sydney's median home price of $1.75 million sits at $78,262, and in Melbourne the figure on the median of $1.083 million is $62,326. Property strategist Michael Yardney told 9News that downsizers can face up to $100,000 in tax alone, to say nothing of agent fees, conveyancing, and moving costs. As one analyst put it, the current system taxes movements heavily and ownership lightly, which is "a great model if you want people to stay put, but a terrible model if you want to encourage constant rightsizing across the property market."
A compounding problem is that the middle suburbs where Baby Boomers predominantly live have seen very little downsizer-appropriate housing added, thanks in large part to NIMBYism and local council resistance. Yardney told 9News that these suburbs are "woefully underdeveloped when it comes to medium-density housing", leaving older homeowners with nowhere suitable to move even if they wanted to.
South Australia Moves First
South Australia is poised to become the first state to completely abolish stamp duty for eligible downsizers. Premier Peter Malinauskas announced that, if re-elected, a Labor government would scrap stamp duty for South Australians aged 60 and over who sell their family home and purchase a newly built or off-the-plan property valued at up to $2 million. The proposal would allow eligible buyers to save up to $103,830 in stamp duty, a substantial increase on the $15,000 concession proposed by the state opposition.
With housing supply and affordability central to voter concerns, stamp duty reform has again emerged as a powerful political lever. If South Australia proceeds with a full exemption for downsizers, it may place pressure on other states to consider similarly bold measures.
The honest accounting on Australia's housing crisis ultimately points toward a confluence of failures: decades of undersupply, planning systems captured by incumbent homeowners, tax distortions that reward holding over transacting, and, yes, a migration programme that was scaled up without a matching infrastructure and housing commitment. As Cameron Kusher argues, if Australia wants to maintain high population growth, it should "have a plan to link this growth to housing, infrastructure and employment policy" rather than treating them as separate policy domains that happen to collide. That integration has never occurred, and that absence, more than any single variable, is what the data consistently shows.
For investors and policymakers alike, the lesson is the same: scapegoating one lever while ignoring the rest guarantees that the crisis persists regardless of which party holds the immigration portfolio. The smart money is on the states that move first on both planning reform and stamp duty, not on waiting for Canberra to control population flows as a substitute for building more homes.