Sydney housing “severely unaffordable”

The survey involved 272 markets in six countries including Australia, the United Kingdom and the United States. Sydney came in second worst on the housing affordability scale, following Canadian city, Vancouver.

According to the latest reports by property research group, RP Data Rismark, the median price of a Sydney house over the December quarter in 2009 was $600,000, up 10.6 per cent on the same period in 2008. The median price of a Sydney unit was $430,000, up 13 per cent on the same period in 2008.

Chief Executive Officer, Aaron Gadiel, of property development lobby group, Urban Taskforce, said that home ownership had become increasingly out of reach for Sydneysiders because of escalating housing prices. “Sydney’s level of home ownership is now lower than every Australian capital city, bar Darwin,” Mr Gadiel said.

NSW Save Our Suburbs President, Tony Recsei, echoed this sentiment. “It has put owning a home out of the reach of many, many people: most young people and the underprivileged will never be able to own their own home.”

Newtown couple, Ben Spiers-Butcher and Sylvie Ellsmore, who began looking for a house to buy last year in Redfern-Darlington said house prices went “berserk”. “It was extremely stressful going along to auctions where prices would invariably go a lot higher than what anyone said they would before the auctions,” Mr Spiers-Butcher said.

“I remember going to one place where we turned up and they said it’d probably go for $560,000 – it went for $720,000 – that was in Darlington. Our last option, the real estate guy was saying it’d go for $600,000 – it went for $890,000 – that was in Redfern on George Street. At that point we just gave up.”

The couple found themselves looking to buy a house when they were evicted from their rental property in Redfern after questioning why the rent had suddenly jumped 25 per cent.

Mr Gadiel said the lack of housing development was to blame for expensive housing prices. “Sydney’s skyrocketing home prices and high rents are the inevitable result of low rates of housing construction. The rate of new home production [in NSW], per head of population, has halved in the last five years,” he said. “We need to see local councils and government making decisions to approve new development.”

A spokesperson for the NSW Minister for Planning said that the Demographia survey conveyed a misleading picture of housing affordability in Sydney.

“The survey only covered houses – not units, which make up more than a third of Sydney’s residential stock. In most US cities, houses tend to be located much further away from the CBD than they are in Sydney.”

The NSW Government Metropolitan Strategy estimates that Sydney will need 640,000 more homes by 2031. There are plans for 50,000 homes to be built in the next decade in Sydney City and in the east and inner-west, including Green Square, Redfern-Waterloo and Central Park (former Carlton and United Breweries site in Broadway).

Photo: Ali Blogg- Sylvie Ellsmore and Ben Spiers Butcher

Source: South Sydney Herald March 2010 www.southsydneyherald.com.au