It’s not groundbreaking news that the housing crisis is the biggest cost of living challenge that Sydneysiders are facing. And though it’s been reported that rental prices are starting to plateau, the crisis isn’t going anywhere – with our city’s population rising faster than any other city on the east coast, and our housing supply falling behind. In an attempt to address the issue, the New South Wales Government has released its housing crisis plan – which involves rebalancing housing across the state and building new affordable homes close to existing and developing infrastructure.
A recent study released by consultancy group KPMG found that the number of new homes completed in Sydney was 25 per cent lower than in Melbourne, with only 32,000 new dwellings built in Sydney in 2023. And though this number might seem like a lot of new addresses, the NSW Department of Planning outlined back in 2022 that the state should be building 45,200 new homes per year to meet the demand of a growing population. This target – which includes 28,500 new homes per year in Greater Sydney and 16,700 in regional NSW – should see the completion of 904,000 homes by 2041, so we’ll need to step up our construction game if we want to get there. Currently, our housing supply shortfall is contributing to rental prices for Sydney units increasing by 24 per cent in 2023, and the price of renting an entire house rising by 11 per cent.
The Minns Labor Government’s transport-oriented development plan to address Sydney’s housing crisis will focus on four key areas: developing new, well-connected precincts, rezoning 31 locations across NSW allowing for 138,000 new homes to be created within 400m of Metro or suburban rail stations, reforming the regulations around low and mid-rise housing approval, and creating well-connected communities through accessible entertainment hubs.
Premier of New South Wales, Chris Minns said:“The simple truth is we don’t have enough well-located homes for the people who make up our city – and that has to change if we want our kids to be able to afford a home in Sydney and not leave for other states."
The focus on improving transport to connect new housing developments throughout the city comes following the confirmation that Sydney Metro West will be going ahead, with 25,000 new homes set to be built on the current site of the Rosehill Racecourse as part of the Metro West development plan. Sydney’s Metro will play a key role in informing Sydney’s new housing developments, with the new, high-speed routes aiming to connect Sydneysiders from across the city to work and entertainment hubs. The Minns Government's new housing plan also involves allowing for more high-density housing developments to be approved, with a number of locations in the city being identified as priority locations. In order to facilitate the construction of high-density affordable housing, the government is offering a new State Significant Development pathway for proposals of $60 million or more, with the caveat that construction must start within two years of approval.
“Most areas of the country are working through the backlog of stalled projects, but Sydney and Melbourne, with their focus on higher density developments, are still facing challenges in making projects financially viable,” says Terry Rawnsley, KPMG Urban Economist.
Currently, the average house price in Sydney is 14 times the average income – as opposed to five times the average income back in the early 1980s. While we wait to win the lotto, here’s hoping that these planned reforms can move the needle.