Record immigration can be a major boost for the country's economy in the coming years but it will put pressure on housing supply, the governor of the Reserve Bank of Australia (RBA) has said.

During his address to the 2009 Economic and Social Outlook Conference Dinner yesterday, governor Glenn Stevens hailed the Australian economy's performance during the economic downturn and predicted that correct planning could see it quickly return to prosperity.

However, he pointed out that the record immigration currently seen in Australia, the highest since the 1960s, would mean major challenges for policy makers.

"It [immigration] may help alleviate capacity constraints, insofar as certain types of labour are concerned. On the other hand, immigrants need to house themselves and need access to various goods and services as well. That is, they add to demand as well as to supply."

Stevens added, "It follows that the demand for additional dwellings, among other things, is likely to remain strong,"

The RBA governor said that this would have corresponding effects on to urban infrastructure requirements and queried whether enough is being done to make
the supply side of the housing sector more responsive to increasing demand.

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