NSW "homes monitor" launched; reports massive housing shortfall

A quarterly homes monitor, recenly launched today by the McKell Institute, shows Sydney is falling well short of any target for averting a long-term crisis in housing affordability.

There were 3017 homes built in Sydney in the first quarter of the year, or 48 per cent below the target of 5825 dwellings a quarter set by the former NSW Labor government in its metropolitan plan to 2036.

Despite this shortfall, the annual target of 23,300 new homes is set to be increased by the Coalition government to at least 25,000 in its 20-year metropolitan strategy, due at the end of the year.

In the quarter to June this year, 6720 homes were approved for construction in Sydney compared with 11,434 in Melbourne. The median rent in Sydney for a unit is $470 compared with $350 in Melbourne, and renting a house in Sydney costs $140 more a week at $500.

McKell Institute executive director Peter Bentley said: “Melbourne’s been approving more and building more. This does have a flow-on effect – the housing and rental costs are much lower.”

Melbourne has long tended to have a buyers’ price advantage. The median buying cost of a unit in Sydney is $464,124 compared with $392,862 in Melbourne. The gap widens for houses: Sydney buyers spend about $642,425 compared with $531,167 in Melbourne.

The McKell Institute urges the building of a new wave of terrace housing, townhouses and medium-density flat developments in Sydney’s inner and middle-ring suburbs, to help address the housing shortage.

The CBD has added just 165 new homes in the first quarter, 68 per cent below Labor’s target of 508 new dwellings. Mr Bentley said “not in my backyard” (NIMBY) opposition to in-fill development was largely to blame.

The state government has estimated that Sydney will need 570,000 more homes by 2030. This would require more than 30,000 new dwellings to be constructed each year.

The McKell Institute has called for a “mid-range” target of 35,000, in line with housing demand forecasts by the National Housing Supply Council, an independent body set up by federal Labor in 2008.

Copes of the Homes Monitor report may be found here.


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