A massive boost to Sydney’s housing supply has barely had an impact on sky-high prices, a New South Wales parliamentary inquiry has heard.
The inquiry was held yesterday — on the same day a new Grattan Institute report found dramatic drops in home ownership levels among younger and poorer Australians.
The report argued the best way to address affordability in the long term was to increase the supply of townhouses, terraces and mid-rise apartments in middle ring suburbs, 10-35 kilometres from Sydney’s CBD.
But Shelter NSW’s principal policy officer Adam Farrar told the Upper House inquiry that while supply has been boosted, it had not been enough to “turn around the Titanic”.
“We’ve seen record delivery of housing in NSW, [the Government has] done an excellent job on that front,” he said.
“But it hasn’t done it in a way that’s made any impact on affordability.”
A man laughing.
Last week a national property report by CoreLogic found housing values — on a national basis — had fallen 0.8 per cent since September 2016.
Sydney was the weakest market with housing values down 2.4 per cent last quarter.
However, the city’s median property price remained well over $1 million.
Mr Farrar acknowledged that results could not be expected straight away.
He said that today’s new housing stock might be more affordable in 50 years, when they had aged.
“You don’t turn the Titanic around immediately,” Mr Farrar said.
“Nonetheless, I think you would expect to have seen more of an impact than we have.”
Premier defends Government’s record
Premier Gladys Berejiklian defended her Government’s efforts to tackle housing affordability, offering first-home buyers a hand through stamp duty concessions.
“Previous to our intervention, very few people were getting into the market for the first time,” Ms Berejiklian said yesterday.
In last year’s budget, the NSW Government released a suite of housing affordability measures, including abolishing stamp duty for first-home buyers on existing and new homes up to $650,000 and doubling the foreign investor surcharge.
Affordability and renting
Mr Farrar also cautioned that replacing older homes with new apartments in middle-ring suburbs could actually push up prices.
“The majority of apartments are being delivered in the highest cost areas,” he said.
“When we think about the shape of Sydney and the densification, it’s that renewal that’s driving the market.
“It’s also taking the existing affordable housing out of the market because renewal basically knocks down the old which was affordable, and in many cases was where people … managed to get that toehold into home ownership.
“They’re now being forced out by redevelopment.”