The Illawarra solution to Sydney’s population strain

Regional areas across NSW, particularly those within commuting distance to Sydney such as the Illawarra, could provide a smart solution to the challenges of population growth, worsening housing affordability and quality of life for people in Sydney.

The Department of Planning and Infrastructure recently released updated population projection figures which showed that the Sydney population was growing much faster than predicted only a couple of years ago. Updated forecasts showed Sydney was now expected to have about 6.42 million people in 20 years – 170,000 more than predicted only two years earlier.

Population projections for the Illawarra were also revised slightly upward with the population across the four council areas predicted to be 471,700 by 2036, which is a total increase of 16.6% from 2016.

The Greater Illawarra: Smart Growth Agenda commissioned by the Property Council in response to the population projections used in the Illawarra Shoalhaven Regional Growth Plan, found that an ‘aspirational’ but moderate population growth target of 1.4% per annum for the region is warranted. This compares to the growth rate of 0.8 – 0.9% used in the regional plan, which very conservatively follows long-term trend analysis.

Given that Sydney is struggling under pressures of strong population growth, a housing affordability crisis, and transport infrastructure groaning under excess demand, there is a mounting case for greater investment in regional locations to provide for smarter growth and greater liveability. Such an approach requires investment in infrastructure to unlock faster connectivity to Sydney, protection of our natural assets, and maximising our existing infrastructure by densifying around the Illawarra’s existing urban centres.

This trend of relocating to regional areas is already underway, reflected in increasing house prices in the ring around Sydney. Knight Frank’s Australian Residential Review July 2016 found that Wollongong, alongside the Blue Mountains and the Central Coast actually outpaced Sydney’s house price growth. Houses in the Greater Sydney region increased 12.2 per cent over the 12 months to the first quarter 2016, while the Blue Mountains jumped 17.8 per cent. The Central Coast and Wollongong saw growth of 15 per cent and 13.6 per cent respectively.

Domain Group chief economist Andrew Wilson stated “The suburban sprawl of Sydney has caught up and sooner rather than later we’ll consider Wollongong part of Sydney.”

The Illawarra provides more affordable housing within reasonable proximity to Sydney by road and rail, whilst offering a scenic or coastal lifestyle when the working day is over. Many of those who have joined the local labour force in the past 5 years commute to Greater Sydney (40% for the Region, and 55% for Wollongong LGA), and virtually all net migration into the four Greater Illawarra LGAs has been from Greater Sydney.

The Illawarra should be recognised for its contribution in housing an increasing share of Greater Sydney’s population growth, which could be accelerated with commensurate infrastructure funding compared with other regions on the metropolitan periphery. The enabling infrastructure required to support this growth could be more cost effective compared to some of the growth areas of Sydney which are faced with much higher land costs, whilst providing higher levels of liveability for residents.