Rightly or wrongly, the level of migration to Australia promises to be a headline issue in the lead up to the next federal election, due to take place before May 2028. And both sides of the political aisle are promising to bring it down.
Much of the focus is on alleviating stress on the housing market, with economic modelling recently released by One Nation suggesting its preferred reduction in migration numbers would save renters between $2,000 and $4,300 a year by reducing demand in the rental market.
Given the recent experience in Canada and New Zealand, there are real world examples that can actually put such projections to the test.
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The controversial right-wing party has certainly forced debate on the topic. Under its proposed cuts to migration, the number of temporary visa holders would be reduced by around 750,000 over three years, with net overseas migration set to go significantly into negative territory on a year-on-year basis until eventually rising to a level of 130,000 per year.
One Nation has called for a big reduction in migration numbers after a recent surge. · Home Affairs/One Nation
When revealing its modelling on the impact on rents, three scenarios for asking rents were laid out, with a low, medium and high impact on real rents modelled.
It is worth noting before getting into the numbers that under no scenario are rents expected to fall in nominal terms and it is assumed that inflation is running at 4.0 per cent, which is the current headline rate in the latest ABS data.
Depending on different assumptions about how strongly rents respond to changes in demand, the low end projected a 4.7 per cent rent reduction, or $2,019 a year while the high end forecast a 10.1 per cent reduction in asking rents, equating to $83 a week or $4,340 a year.
In its central scenario, rents could fall in real terms by 2.3 per cent, it said.
Under more normal circumstances this sort of proposal would have little real-world data to draw on in order to judge its likely accuracy. But this instance is a rare exception. With the migration cuts recently seen in Canada and New Zealand, there is hard data on the impact of large migration cuts on real asking rents.
What happened in Canada and New Zealand
Given that One Nation is targeting a net overseas migration intake 130,000 per year after the drawdown in temporary visa holders and they have confirmed net overseas migration will be significantly in negative territory, we will be using a placeholder figure of -120,000 for the first three years of a One Nation government.
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In Canada, net overseas migration was cut from a peak of 1.2 million in the March quarter of 2024 to a low of 151,800 as of June. This represents a net intake which equates to 0.36% of the population.
For New Zealand, net overseas migration peaked in October 2023, at a figure of 133,800, dropping to a low of 9,200 in the year to August 2025. This level represents 0.17% of the Kiwi population.
If Australia was to realise today’s pencilled in figure of -120,000, it would represent a figure equivalent to -0.42 per cent of the population (based on a recent ABS Population Clock snapshot).
Migration cuts and real asking rents
Since One Nation’s figures cover the impact on inflation adjusted asking rents, that will be metric by which the performance of Canada and New Zealand will be assessed from the time that migration levels peaked in the two nations.
In the nine quarters of data since net overseas migration peaked in New Zealand on a rolling annual basis, real rents have declined by 8.1 per cent.
For Canada, we have eight quarters of data since net overseas peaked, during which real rents have declined by 11.9 per cent.
MORE: Rents in Canada fall 4.2% in September, marking 24 months of decreases
In real terms, rents have meaningfully dropped in Canada and New Zealand. · Yahoo Finance
When charted against the outcomes modelled by One Nation playing out in an incremental and linear way, both New Zealand’s and Canada’s real-world experience saw a far greater drop in inflation adjusted asking rents than what One Nation has claimed is possible for Australia.
Is Australia different?
When assessed through this lens of the historic performance of real rents in Canada and New Zealand, the numbers from One Nation appear to be relatively ballpark, with greater falls in inflation adjusted rents actually playing out in the real world.
But there are other variables which could see real rents in Australia take a different path.
With Australia running a level of population growth the National Housing Supply and Affordability Council has concluded is greater than the ability of the construction sector to deliver additional homes for longer than New Zealand or Canada, the accumulated deficit of homes may play a role in supporting rental prices at home.
Australia’s rental crisis has also persisted for far longer than almost anywhere else in the developed world, which has driven more individuals not to form additional households, not only because of high rents, but also because of the availability of rental accommodation.
MORE: The incredible trend shaping Australian households: ‘Landlords should be very grateful’
This may also offer support for rental price growth into the future, as individuals that deferred forming new households take the opportunity of greater rental availability to set out on their own.
On the other side of the coin, the level of per capita net overseas migration being proposed by One Nation is significantly lower than that seen to date in Canada and New Zealand, potentially placing greater downward pressure on asking rents, in the unlikely event it actually materialised.
Ultimately, there is evidence to suggest that large cuts to net overseas migration can drive asking rents significantly lower. It just remains to be seen if Australia
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