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Residents in their child-raising years are leaving the capital in droves, according to a new report from NSW’s Productivity Commission.
In a report titled What We Gain by Building More Homes in the Right Places, the commission revealed that between 2016 and 2021, Sydney lost twice as many people aged 30 to 40 as it gained.
During the said period, 35,000 people in that age bracket came to Sydney and 70,000 left. According to the state’s productivity commissioner, Peter Achterstraat, the reason for the outflow can be attributed to the high cost of housing.
“Many young families are leaving Sydney because they can’t afford to buy a home. Or they can only afford one in the outer suburbs with a long commute,” Mr Achterstraat said.
He appeared to speak to the cohort who are not finding themselves pushed out of the capital due to property pressures when he warned “if we don’t act, we could become known as the city with no grandchildren”.
The report is the third paper in a series on housing to come from the Productivity Commission. Analysis of the city’s housing makeup highlights the need for greater housing density to provide the type of housing solutions often required for people who are in the prime age group for starting a family.
Mr Achterstraat stressed the importance of “building up” in inner Sydney suburbs, not just on the city’s fringes, to boost productivity and wages, cut consumers’ carbon emissions, and preserve land and green spaces.
“Sydney needs hundreds of thousands of new homes over the next two decades. Building more in the places people want to live is a key piece to solving the housing jigsaw puzzle,” the productivity commissioner said, noting how rising housing prices create unequal pressure across the economic spectrum.
“High housing costs work like a regressive tax, with the burden falling disproportionately on low income earners,” he noted.
Highlighting the recent missed opportunity to keep home construction in line with population growth, Mr Achterstraat noted that it was important to make the most of the opportunities presented in the inner city.
He explained that in Sydney, “45,000 extra dwellings could have been built between 2017 and 2022, with no extra land, by allowing higher buildings. This could have seen prices and rents 5.5 per cent lower—$35 a week for the median apartment or a saving of $1,800 a year for renters”.
Locating housing that’s suited to young families in the inner- and mid-rings of Sydney would also allow for a social setup that has been shown to have good outcomes for children, young parents, retirees and the broader community.
“New apartments and townhouses in inner suburbs will let young families live near their parents and their children’s grandparents. The social benefits of abundant, well-located homes are major,” Mr Achterstraat said.
In the face of rising temperatures, the report indicated that increasing density has climate-related benefits as well.
It cited research that building closer to Sydney’s coast would relieve households from extreme heat, with some locations on the fringe of Sydney recording 360 days over 35 degrees between 2007 and 2022, compared to just 66 days in the CBD.
Though putting up high rises among existing communities is always a controversial proposal, the commission expressed its confidence that the city could adapt to increased density.
“In the last year, we have seen a mature and reasoned discussion from all sectors of the community. The key to progress from here is to listen to the opponents to change, but also give due weight to the benefits of density and the views of the broader community,” Mr Achterstraat said.
Addressing the report’s findings, NSW Minister for Planning and Public Spaces, Paul Scully, vowed that “the NSW government is not going to turn [its] back on housing; it’s a basic need”.
He pushed his parliamentary colleagues from the other side of the aisle to work with the Labor government on its current policies intended to tackle supply.
“The opposition has a choice – they can get behind important reform that will help house the next generation, or they can continue to oppose reform and turn their back on young kids trying to bed down roots in NSW,” Mr Scully said.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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