Invest & Finance
Sydney needs affordable housing now more than ever
The best metaphor for Sydney’s housing market over the past two years would have to be a yo-yo.
What better way to describe the impact of the recent property downturn, followed by the Indian Summer housing values experienced after the last Federal election? Every metric you could lay your hands on said prices were going to boom this year – and then along comes COVID-19.
In the past few weeks, home sellers have disappeared faster than a stack of Quilton at your local Woolworths. You’d think that would be good news for someone like me, who has dedicated their career to delivering solutions for Sydney’s housing affordability issues. But while that lack of supply may bring prices down – and we’re yet to see that, by the way – some problems remain.
For example, with less houses on the market, options for people wanting to buy a home right now (and yes, they are still out there) are severely limited. Renters may be better off in the short term as Airbnb property owners pivot to accept residential tenants in the wake of the NSW Government’s tougher travel restrictions, but the push-me-pull-you between these owners and renters has never seen a long-term win for renters in my time in the sector.
While all the projections on population growth, market performance and housing values have been thrown by COVID-19, even Queen Elizabeth has stepped up to warn us that this is temporary. And as we move past this crisis, it would be naïve of us to think that the old problems of finding good quality, affordable housing in Sydney won’t be waiting for us on the other side.
I’m grateful that for now, State and Federal Governments have allowed essential building and infrastructure work like residential home-building to continue as Australia deals with the COVID-19 pandemic. Before this hit, the building sector had the single most effective solution to addressing housing affordability issues in Sydney – and that is increasing supply of low- to high-density housing where people work and want to live.
Making housing affordable
No-one knows what long-term impact coronavirus will have on Sydney’s property market. All we have to base our decisions on is where we were before the pandemic – and that was an overpriced, highly competitive market for established housing that was inflating fast.
By comparison, greenfield land and new home-building prices were holding steady as existing housing prices escalated. Buying land and building a new home in Sydney’s emerging suburbs was the more affordable option for buyers trying to purchase their first home, and for investors working to build wealth through property without the high costs associated with buying in established suburbs.
Greenfield house and land packages have always been the more affordable option for buying property in Sydney. In the short term, there’s little reason to expect that will change as existing housing stock plummets – and if anything, I would imagine being stuck in the house for the next month or two will only increase our appetite for finding a better home to live in.
It could be that COVID-19 proves to be the miracle that solves Sydney’s housing affordability crisis in the longer term as people turn away from established, unaffordable homes to new ones in desirable growth areas. For now, the social and economic impacts of the pandemic have made the need for affordable housing in this city more important than ever –in terms of both renting and owning a home.
Janelle Goulding is a housing affordability expert with more than 30 years’ experience in creating solutions to make Sydney homes more affordable. Janelle is general manager of Thrive Homes.