Sydney's housing stress entails more home supply

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With the recent Household Income and Labour Dynamics in Australia (HILDA) report indicating a rise in housing stress, The Urban Taskforce underscored that this is not the time to slow down housing production.

The industry group said that the growth in housing stress in Sydney from about 10% in 2005-08 to 13% in 2013-16 requires a response from the housing market. In fact, home values have surged drastically in the last decade and have brought problems to the lowest 40% of income earners who spend more than 30% of their income on housing.

The deemed best way to counter this issue is to ensure that there are lots of new homes built at a range of affordability levels, but the recent actions of the New South Wales (NSW) government’s seem to be doing the opposite.

“Housing supply needs to be encouraged by councils and the state government but a number of recent decisions by the NSW Government in a pre-election environment will have the effect of reducing supply dramatically,” the group said in a disclosure.

Some of the decisions being referred to were allowing 50 NSW councils to defer a terrace house code for a year and stoppage of planning proposals in Ryde for two years. In addition, the government also delayed the Planned Precincts on the Sydenham to Bankstown rail corridor.

Instead of regulating home prices in the city, The Urban Taskforce believed that “the result of these back-downs from previous policy will be to slow down housing supply and therefore push home prices up again.”

 “[We are] keen to assist with the provision of more affordable housing in line with the direction taken by the NSW Government agency Landcom. The Landcom approach uses the Affordable Rental Housing SEPP to provide a percentage of affordable homes for a ten year period. With a reasonable uplift in floor space, we believe that thousands of affordable rental apartments could be provided across Sydney,” noted Urban Taskforce.

In the end, it was reiterated that Sydney’s housing problems can only be solved in two ways. The first is when the NSW Government allots budget for affordable and social housing, and the second is if the private sector gets incentives to provide affordable housing.

 

Related stories:
How To Fix Australia's Broken Property Market
The Eight Month Home Loan Downturn

 

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