Sydney’s anaemic rate of home building in the early 2000s plunged to lower levels than during the Great Depression and World War II, the report said. The experience of Auckland, New Zealand’s largest city, since 2016 provided an example of how opening up more of the city for low- and mid-rise medium-density housing could reduce rental prices.
Overall, academic evidence suggested prices for a three-bedroom Auckland dwelling could be rented for 22 to 35 per cent less than without the changes.
In addition to the economic benefits, the Productivity Commission argued greater density would increase the ability for a higher proportion of children to attend quality schools. On average, families were paying a 2.7 to 3.3 per cent premium to live within the catchment of a school with strong credentials, or about $50,000 extra on a $1.5 million home.
Cheaper rents would help stall the exodus of young Sydneysiders who were moving to other states and regional NSW to find housing. The report found about two-thirds of departures are from people aged 25 to 64, with 30- to 40-year-olds the largest-contributing cohort to outflows between 2016 and 2021.
“Why do we see this outmigration from Sydney and NSW? A simple explanation is that Sydney’s high housing costs erode much of the benefit of its higher wages,” the report stated.
In Sydney the typical household living in a private rental spends almost a quarter of annual income on housing, compared with only a fifth in Melbourne.
Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.
Recent Comments