Experts said migration has had the most acute impact on the rental market, where long lines at open homes have become the norm. Picture: Sam Ruttyn
Cutting migration back to pre-pandemic levels would trigger immediate relief for the nation’s battered renters and first-home buyers, new modelling shows.
The study by independent property research group FoundIt revealed migration cuts would slam the brakes on runaway prices, halting the “structural vice” squeezing the entry-level housing market.
Stripping roughly 100,000 people from the intake to return to pre-Covid levels would forcibly compress growth without causing a catastrophic housing crash, the study found.
FoundIt’s modelling showed that aligning migration with building completions would strip 2 to 3 per cent off national home price growth annually.
The impacts would be immediate: Sydney prices, otherwise on track for a 2 per cent gain this year, would drop by about 1 per cent, while Melbourne, Canberra and Hobart prices would also drop.
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QLD suburbs where migration has driven up prices
NSW suburbs where prices would drop if migration cut
Housing demand remains elevated. Picture: Rohan Kelly
Home prices in Brisbane, Adelaide and Perth, currently running red-hot, would cool to a more sustainable 3 to 4 per cent annual growth range.
The calls for a migration circuit breaker come as Institute of Public Affairs analysis showed housing supply has failed to match population growth.
According to IPA analysis of 2025 data, net permanent and long-term arrivals hit a record-breaking 480,520, exceeding the previous 2023 record by 7 per cent. At the exact same time, housing approvals fell annually by 15 per cent in December 2025.
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This supply and demand dynamic helped push national dwelling prices up by about 7 per cent, or nearly $80,000 over 2025.
FoundIt head of research Kent Lardner said bureaucrats and politicians have recklessly ignored the demand side of the equation.
Higher migration levels have driven up rents, which in turn have spilt over into the purchasing markets, FoundIt revealed. Picture: Rohan Kelly
“Since Covid, there has only been one issue talked about regarding house prices, which is supply. In reality, anyone who has done high school economics, knows its supply and demand,” Mr Lardner said.
“One thing we can control is demand from migration. It’s that simple.”
Price relief would occur where it is needed most: the sub-$750,000 entry market, Mr Lardner said.
Currently, new arrivals overwhelming enter the market via rentals and affordable purchase segments.
Rent rises in turn made entry level properties more attractive for investors, pitting first-home buyers and aspiring landlords into brutal bidding wars for the same cheap stock, FoundIt showed.
BRLeader of the Opposition Angus Taylor has proposed migration cuts. Picture: NewsWire/Tertius Pickard
Removing the migration pressure on rents would provide renters and home buyers relief at the bottom end of the market, Mr Lardner said.
“The sub-$750,000 market is the most competitive in the country,” he said. “That’s where first-home buyers reliant on small deposits and investors often compete. If we ease migration, it helps that market.”
Among those calling for a reduction in migration is the new Liberal leader Angus Taylor, who has revealed the Coalition will back plans to enforce stricter migration controls.
No specific numbers for planned intake have been revealed, but Mr Taylor has hinted at returning arrivals to pre-Covid levels.
SQM Research director Louis Christopher said proposals by new Liberals leader Angus Taylor to cut migration levels could “work” and deliver rental relief in “about six months”.
NET PERMANENT AND LONG-TERM ARRIVALS
Net permanent and long-term arrivals. Source: IPA, ABS
He noted the Labor government had fallen behind its goal to build 1.2 million new homes by 2029, explaining that migration cuts most effective if implemented before 2028.
“(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.
Relief would be strongest in the gateway cities of Sydney and Melbourne, where migrants typically land first, Mr Christopher said.
“If (migration) dropped, you would see rents fall in Sydney and Melbourne,” Mr Christopher said.
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The Albanese government has been criticised for the rate of new housing construction. Picture: David Caird
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”.
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, more expensive homes, and longer lines at rental inspections,” Dr You said.
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”.
“We are blaming ineffective policy,” Mr Christopher said.
“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.”
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 themselves. You cannot blame those wanting to come here to enjoy our way of life”.
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