High housing costs are forcing tens of thousands of young families to depart Sydney for regional New South Wales and alternative states, according to a new report from the NSW Productivity Commission.
The report, “What we gain by building more homes in the right places” shows that from 2016 to 2021, Sydney experienced a net loss of double the number of individuals aged 30 to 40 compared to those it gained. While 35,000 individuals relocated to Sydney during this period, a staggering 70,000 departed the city.
Productivity Commissioner Peter Achterstraat AM said “many young families are leaving Sydney because they can’t afford to buy a home. Or they can only afford one in the outer suburbs with a long commute”.
“Sydney is losing its 30–40-year-olds; if we don’t act, we could become known as the city with no grandchildren.”
Mr Achterstraat said the exodus of talent highlighted the need for greater housing density to help make Sydney a more affordable place to live.
He said ‘building up’ in inner-Sydney suburbs, not just on the city’s fringes, would boost productivity and wages, cut consumers’ carbon emissions, and preserve land and green spaces.
“High housing costs work like a regressive tax, with the burden falling disproportionately on low-income earners,” he said.
“Sydney needs hundreds of thousands of new homes over the next two decades. Building more in the places people want to live is a key piece to solving the housing jigsaw puzzle.
“45,000 extra dwellings could have been built between 2017 and 2022, with no extra land, by allowing higher buildings. This could have seen prices and rents five-and-a-half per cent lower—$35 a week for the median apartment or a saving of $1,800 a year for renters.”
Not only are thousands of people being pushed out or priced out of Sydney, but new homelessness data from Homelessness NSW, also shows a sobering spike in the number of people sleeping rough.
The increases in numbers are across Sydney including the Inner West, Ku-ring-gai, Mosman and Canterbury-Bankstown Local Government Areas, where hundreds of new people have found themselves homeless.
Minister for Planning and Public Spaces Paul Scully said the reality of rising housing prices and lack of available housing is making it harder for people to stay in the same suburbs as their families or live close to their jobs.
“If there’s no supply, there’s no homes for the next generation. The NSW Government is not going to turn their back on housing, it’s a basic need,” he said.
The report from the Productivity Commission presents evidence that large, compact cities enhance the productivity of both workers and businesses.
The majority of this advantage stems from the abundant learning prospects available in such environments.
Additionally, various additional social advantages are underscored, such as granting families proximity to excellent educational institutions, high-quality public spaces, a broader array of goods and services and increased leisure time with loved ones.
“New apartments and townhouses in inner suburbs will let young families live near their parents and their children’s grandparents. The social benefits of abundant well-located homes are major,” Mr Achterstraat said.
“We know from overseas that density done well provides benefits for households, communities, and the economy.
“I’m confident we can make density work for us.”
“In the last year, we have seen a mature and reasoned discussion from all sectors of the community.”
“The key to progress from here is to listen to the opponents to change but also give due weight to the benefits of density and the views of the broader community.”