Plus Agency’s Mahan Shishineh (left), pictured with fellow agent Fiona Yang, recently sold a house to a new arrival for over $4.6m. Picture: Rohan Kelly
Slashing record immigration would slam the brakes on Sydney’s skyrocketing home prices and rents, giving battered tenants and home buyers immediate relief, new modelling has revealed.
The FoundIt analysis of building supply and population growth showed a reduction in the intake of new arrivals would drive a “near instant” shift in the housing market.
It revealed Sydney house prices, otherwise on track for a 2 per cent gain this year, would fall by about 1 per cent if migration intake dropped by 100,000 people, pulling intake back in line with pre-Covid averages.
Falls were expected to be much larger in outer city areas with a higher supply of new houses, along with inner city pockets with a glut of newly built high-rise apartments.
Critics of the Albanese government’s immigration policies have noted building supply is falling below Housing Accord targets of 1.2 million new homes by 2029. Picture: Hilary Wardhaugh
Growth over later years would stabilise or “flatten”, according to the FoundIt research, which also reviewed how deep migration cuts affected similar housing markets overseas such as New Zealand and Canada.
“Sydney prices are high enough that a few (percentage) points of growth make a huge difference,” said FoundIt head of research Kent Lardner.
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Mr Lardner, a pioneer in the world of Australian property data, said part of the reason this change would be immediate is because of the sheer impact immigration has had on prices and rents in recent years.
Migration levels have had a significant effect on the market and a temporary pause back to levels recorded over the 2010s would give building supply time to catch up, he said.
“The danger if migration stays high is not that Sydney becomes severely unaffordable, it already is, it’s that Sydney’s entry level market may vanish altogether,” Mr Lardner said.
Suburbs likely to see some of the biggest improvements in affordability would be suburbs with some of Sydney’s few remaining deals under $750,000, FoundIt revealed.
This included home prices in the suburbs of Lakemba, Canley Vale, Canley Heights, Warwick Farm, St Marys and Auburn.
These suburbs had attracted strong investor activity because of migration-fuelled rises in rents. This investor activity would wane if migration dropped, taking pressure off prices, FoundIt revealed.
The calls for a migration circuit breaker come as Institute of Public Affairs analysis of ABS data showed housing supply has failed to match population growth.
According to IPA analysis of 2025 ABS data, net permanent and long-term arrivals into the country hit a record-breaking 480,520, exceeding the previous 2023 record by 7 per cent.
At the same time, housing approvals fell annually by 15 per cent in December 2025.
This supply and demand dynamic helped push Sydney dwelling prices up 7 per cent, or about $103,000, over 2025.
KILLARA: A three-bedroom unit in this luxury new block sold in February 2026 for $2.78m to an alleged new arrival, who reportedly paid in cash, no mortgage.
Dr Kevin You, senior fellow at the IPA, called the government’s National Housing Accord one of the “greatest policy failures” of the past 25 years.
“You do not need to be an economist to know that a flatlining housing supply and a large, migration-induced increase in housing demand results in higher rents (and) more expensive homes,” Dr You said.
It should be noted the ABS count of net overseas migration, a different metric of arrivals, was 306,000 over 2024/25 – well above pre-Covid levels, but down from 429,000 the year prior and a peak of 661,000 over 2022/23.
Plus Agency director Peter Li, who along with team Fiona Yang and Mahan Shishineh, market new developments to foreign buyers, said most were buying to pre-empt a permanent move to the country.
Real estate agent Peter Li said overseas-based buyers preparing for a move to Sydney were one of the biggest markets for units sold off-the-plan. Picture: Sam Ruttyn
“About 80 per cent of our foreign buyers are preparing to come here,” he said. “They are not planning to come naked. They are arriving with a lot of capital for buying … not just renting.
“Cutting migration would have a huge impact. They are the biggest market for newly-built (units).”
SQM Research director Louis Christopher said the Labor government had fallen behind its goal to build 1.2 million new homes by 2029 and migration cuts would be most effective if implemented now.
“(Intake) should have been cut years ago,” he said.
Mr Christopher said the biggest impact of a temporary reduction in migration intake would be on rents.
“If (migration) dropped, you would see rents fall in Sydney and Melbourne,” Mr Christopher said.
This six-bedroom Lindfield house allegedly sold in February for $4.68m to a foreign buyer preparing to settle in Sydney within weeks.
He noted that the skyrocketing rents seen over the post-border reopening period were the “direct result of a surge in population, driven in large part by excessive migration”.
Experts stressed that the problem was with political leadership, not the new arrivals.
Mr Christopher pointed out the “political reluctance” to address demand, noting that suggesting temporary, cyclical cuts to match our broken housing supply should not be a “political issue”.
“There is a time and place for strong migration, and time and place for weaker migration, we are in a period where we need weaker migration,” he said.
Dr You added: “The blame for the problems caused by out-of-control mass-migration in recent years should be directed squarely at the federal government, not the migrants.”
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