Housing unaffordability in Sydney is costing the local economy more than $10 billion per year, according to a recent paper published by the Committee for Sydney in partnership with urban intelligence firm, The Business of Cities.

Benchmarked internationally, Sydney fulfils all the key metrics for chronic housing unaffordability:

  • Median property price is over 8 times the median household income for more than five consecutive years: Sydney’s median property price is over 13.3 times the median income, up from 8.3 a decade ago.
  • More than 33% of renter households are in housing stress (paying over 30% of monthly income on housing costs): 35.3% of Sydney renter households experience rental stress.
  • The city is placed in the world’s 20 most unaffordable cities for housing: Sydney is ranked second least affordable major housing market after Hong Kong.

While there has been extensive research into the social costs of unaffordable housing, this global benchmarking study considers the implications of chronic unaffordability for Sydney’s long term economic success.

Some of the major fallouts of the chronic housing crisis, which add up to the multi-billion-dollar hit every year include the city’s inability to attract or retain talent ($1.5 billion); the eroding effects on R&D and innovation by companies ($2.9 billion); and productivity inefficiencies due to extra labour costs and longer commutes for workers ($6.8 billion), the study reveals.  

Eamon Waterford, CEO of the Committee for Sydney views the chronic housing unaffordability as a threat to the future potential of Sydney.

“The housing crisis is deeply impacting every single one of us, but we’ve got to be clear that what we’re experiencing isn’t just a short-term housing crisis, it’s now chronic and it’s costing Sydney’s talent, innovation and productivity more than $10bn per year.

“The costs are being felt most by young Sydneysiders just starting to establish their careers, putting a handbrake on the opportunities that would have been open to them if housing in Sydney was more accessible and affordable.

“If we don’t take urgent and sustained action, chronic housing unaffordability will continue to erode Sydney’s competitiveness on the global stage and our city’s long-term economic success.

“We can’t solve this overnight, but we can commit to the bold, brave and long-term program required to send Sydney’s chronic housing crisis into remission and stop future relapses.”

The Committee for Sydney recommends three key actions:

  • Bring Sydney in line with other global cities by introducing an inclusionary zoning target (to provide affordable housing in new developments) on all rezonings, with appropriate transitional provisions;
  • Invest in much more social and affordable housing;
  • Significantly increase housing supply and do it well – with good transport connectivity, affordable housing, open space, schools, childcare, shops and services.

Read the report here: Chronically Unaffordable Housing - CFS (sydney.org.au)

Photo source: Committee for Sydney report | Credit: ThinkstockPhotos