Outgoing National Australia Bank Ltd (ASX: NAB) CEO Ross McEwan has an alarming prediction for Australia's economy.

And whether you're a renter or a homeowner, McEwan's prediction will likely strike a chord.

With immigration levels in Australia surging post the COVID intake pause, and new housing construction slumping, rental vacancies are plummeting, and house prices are rising, despite elevated interest rates.

Speaking yesterday, McEwan flagged the housing crisis as a critical issue for Australia. And one that could hamstring economic growth.

Addressing the housing situation, McEwan said (quoted by The Sydney Morning Herald) "We just don't have enough of it."

This could become a big problem, is the NAB boss' prediction.

"That will slow down the growth of this economy because if you don't have houses for migrants to come in to, we'll soon be cutting off the migration levels coming into the country."

Indeed, the September quarter saw net overseas migration levels top 145,000 arrivals. That brought the annual increase to almost 550,000 new arrivals, well outpacing the number of new homes being built each year.

As dictated by the laws of supply and demand, this is seeing rents and property prices soar.

CoreLogic's national Home Value Index (HVI) rose 8.1% in 2023. Most recently, the HVI increased another 0.6% in February, the strongest monthly gain since October.

Renters are doing it tough as well, with rental vacancies plunging to all-time lows of 0.7% in February.

According to McEwan, "If we can solve [the housing issue], we can keep this economy growing at a good pace and keep productivity lifting in the Australian marketplace, which will make us better as we export overseas as well."

Failing that, NAB's CEO has a rather dire prediction.

"If we don't, well, I think Australia will slow down accordingly," he said.

McEwan will step down as NAB's CEO on 2 April. Andrew Irvine, NAB's group executive business and private banking, will take over the reins.