Sydney’s housing crisis is reaching new heights, with soaring prices driving young families away. If this trend continues, the city risks earning a reputation as a place with no grandchildren, according to the New South Wales state productivity commissioner. Between 2016 and 2021, Sydney experienced a net loss of people in the 30 to 40-year age group, emphasizing the urgent need for increased housing density. The commissioner stressed the importance of addressing the affordability issue by building more homes in the right places.
The high cost of housing in Australia has made it one of the least affordable countries in the world. Factors such as rapid population growth, limited construction, and a preference for smaller households have resulted in a severe housing shortage. Sydney, in particular, faces the challenge of strong opposition to high-rise apartment buildings from local residents. This issue is intensified by the anticipated influx of over one million net arrivals in Australia over the next five years, with migrants predominantly settling in major cities like Sydney.
Compared to international counterparts like London, New York, or Paris, Sydney has lower-density inner-city suburbs, leaving plenty of room for vertical growth. The productivity report suggests shifting attitudes from Not in My Backyard to Appropriate Density in My Backyard. By constructing buildings with an average of 10 stories instead of seven, Sydney could have created an additional 45,000 dwellings without requiring extra land. This would have led to a 5.5% decrease in prices and rents, resulting in an average annual saving of A$1,800 for renters, according to the commissioner.
The report also highlights the need for a fresh discussion on heritage restrictions near the central business district. Numerous Heritage Conservation Areas (HCAs) currently limit new housing, impacting more than half of residential land in prime Sydney suburbs. The commissioner emphasized the importance of preserving the city’s heritage without hindering young people’s access to housing.
We can strike a balance between honoring Sydney’s history and providing affordable homes for the next generation, said the commissioner.
The productivity commissioner believes that following successful models from abroad, density can bring numerous benefits to households, communities, and the economy. By implementing appropriate strategies and breaking through the barriers of affordability and opposition to taller buildings, Sydney has the opportunity to rectify its housing crisis and ensure a brighter future for young families.
It is crucial for policymakers, developers, and residents to collaborate and find innovative solutions to address the pressing housing issue in Sydney. Failure to do so could result in a city that loses its vibrant, youthful character and becomes known only for its unaffordability and lack of opportunities for future generations.
