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Sydney needs supply to stop housing crisis

20 February 2017

Housing unaffordability is heading towards a crisis in Sydney unless it gets more supply, according to REA Group Chief Economist, Nerida Conisbee.

The REA Group Property Demand Index for January 2017 showed that demand levels on continue to surge in Sydney, and house median prices keep breaking records on the Eastern seaboard.

The report revealed that buyer demand rose 7.3% in NSW in January and showed that demand for housing is 23.3% higher than a year ago.

Most of the demand is for houses, with a 29.1% increase in the last year, compared to 4.6% in units.

Nerida said: “Sydney, hampered by long-term underdevelopment, needs action. The only long-term solution to the city’s affordability problem is to increase the supply of housing.

“There are a number of things that need to be done to improve this. This includes amalgamation of councils to improve planning systems and changes to NSW strata laws.”

Nerida says that better relationships between state government and developers should also be a priority, to help partner investment in public infrastructure with new developments.

She added: “Sydney's lack of affordability is an economic issue. If it’s too expensive to live in the city, people will begin to move to more affordable regions and cities.

“The first to move will be those in essential services, such as nurses, doctors, teachers, pharmacists, plumbers, police, who don’t necessarily need to live in a large expensive city to secure work.”