The Housing Gap—Sydney, Australia

Abstract

The median house price in Sydney is $1.12 million (Domain,). For many households, the gap between incomes and median house prices is wide. Those ranging from pensioners to teachers earn less than the amount needed to service a loan to buy a median-priced apartment—even if they had the necessary $71,000 deposit (UrbanGrowth NSW 2016). Sydney recently leap-frogged Vancouver becoming the second most expensive city in the world, behind Hong Kong (Day et al. 2016). With population growth continuing to drive demand for housing, the gap between incomes and house prices shows no sign of shrinking. Landcom (formerly Urban Growth NSW), the NSW Government’s land and housing development agency, is required to respond, as stipulated in the NSW Government’s strategy ‘The government will…provide affordable housing in government-led urban renewal projects and on government-owned sites to meet the shortfall in affordable housing’ (NSW Government 2014). There is an abundance of academic research on housing and housing affordability This paper proposes a very simple one-page diagram which details an analysis of housing price-points compared to householder’s ability to pay. The purpose of keeping to just one page is to respond to busy lives, short attention spans and the need to convey meaning in that environment. Award wages are charted for example households and compared with incomes needed to attain housing on a spectrum from social to private market housing. There is need for diverse housing for rent or purchase for those on moderate incomes and above and more subsidised Affordable Housing to rent for those on very low to moderate incomes and more social housing safety net and the private market can continue to take care of the high income households. Households working in many occupations are affected, not solely those on very low incomes. This supports looking to innovate in the private housing market with excellent design, innovation and ingenuity in construction and financing and planning/regulatory efficiencies to increase the supply of both more rent-controlled Affordable Housing and better overall housing affordability.