"It's not just a housing issue, it's a cost-of-living issue"
Sydney has emerged as the world's second least affordable major housing market, trailing only behind Hong Kong. This revelation comes as a new report from think tank Committee for Sydney highlights the dire consequences of the city's "chronic housing crisis," estimating an annual economic loss of $10 billion.
The report found that the median property prices in Sydney now exceed 13 times the median annual household income, according to The Australian. If the housing crisis persists, the committee predicts an annual loss of $1.5 billion in terms of talent, with 10,000 individuals leaving Sydney's talent pool each year for the next decade. Additionally, the city would face a loss of nearly $3 billion in innovation, resulting in 10% fewer registered patents and 20 fewer well-funded start-ups over the next five years.
The impact on productivity is equally significant, with an estimated annual loss of almost $7 billion, The Australian reported. This stems from increased labour and property-related costs, as well as the rise of "inefficient commutes" due to workers relocating further away from the city centre or areas with accessible public transportation in search of more affordable housing options.
“What we’re experiencing isn’t a short-term crisis – it’s chronic, and it’s costing Sydney’s talent, innovation and productivity $10 billion each year,” Eamon Waterford, chief executive of the Committee for Sydney, told The Australian.
Read next: Housing affordability now at its worst in 30 years – PropTrack
Acknowledging the severity of the crisis, NSW Housing Minister Rose Jackson said that addressing the issue and constructing more homes is a top priority.
“It is not just a housing issue, it is a cost-of-living issue – people are struggling to afford a place to rent, let alone buy,” Jackson told The Australian. “The only way we’re going to get people off the housing waitlist is by getting them into homes – delivering more social and affordable homes is vital to make this possible.”
The Committee for Sydney report, released Thursday, proposes implementing an "inclusionary zoning target" to ensure the provision of affordable housing in new developments. Currently, only 4% of Sydney's housing stock is classified as social or affordable, according to The Australian. The report also recommends investing in infrastructure around new builds.
The state government anticipates the construction of 36,000 homes per year over the next five years, falling short of the demand for an additional 62,800 homes.
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