Sydney Housing prices surge, calling for a state response

BY SATHSARA RADALIYAGODA, TOMMY BOUTROS AND GEORGIA CLARK

Housing affordability continues to plague Sydney with prices in upmarket areas including Bondi reaching new heights, as a state government solution comes under fire.

Sydney’s property prices continue to climb with Domain recently announcing that 78 Sydney suburbs have a median price of above $2 million, including Drummoyne, Randwick, Darlinghurst and Haberfield.

The Greens have been vocal on the state’s ability to change Sydney’s housing affordability. Jenny Leong MP, Member for Newtown and NSW Greens spokesperson for Housing says that greater state regulations could improve affordability.

“At a state government level, The Greens have been advocating for inclusionary zoning, which requires a set percentage of dwellings in a new development to be built and rented out as affordable housing.

With ambitious targets of around 30%, we could see large numbers of affordable units become available across Sydney. Setting those ambitious targets as a condition of approving new developments is key,” she said.

Lee Rhiannon, Senator for NSW argues that abolishing Negative Gearing and stamp duty could create a more equitable housing market.

“Federally, we need to end negative gearing and the capital gains tax discount, swap stamp duty for a broad-based land tax, dramatically expand public housing, introduce a national minimum standard for tenancy legislation and increase direct federal funding for homelessness and social housing,” she said.

Since the 1980s, where baby boomers could easily afford housing in Sydney, the average house in Sydney has risen to $934, 800 or more. Senator Rhiannon said that improving overall access to education and healthcare can also improve access to housing.

“To ensure that everyone has a home we also need to strengthen the social safety net and make sure that things like education and healthcare are truly universal, and guaranteed to all. We need big picture solutions – that is what the Greens are fighting for,” she said.

Professor Hal Pawson heads Housing Reserarch and Policy at UNSW, and is also the University’s Associate Director of City Futures Research Centre.

Professor Pawson said that those who bought homes prior to 2000 have a step above the rest.

“Housing in Sydney is not unaffordable to all. The majority of those in the baby boomer generation who bought their first home prior to 2000 are mostly in a very strong financial position, and their housing costs are either very low or nil,” he said.

Professor Pawson said the issue is both a state and federal one, but that the state is fundamental to alleviating it.

“[The NSW State government] could lobby the Federal Government to phase out the wasteful and damaging tax concessions that incentivize landlord investor property acquisition,” he said.

With the prospect of buying and owning a house seeming impossible, renting has been the quick fix to a long-term issue, where many Sydney residents are now experiencing ‘housing-stress’.

According to the Federal Australian government, “A household is typically described as being in ‘housing stress’ if it is paying more than 30% of its income in housing costs.”

Ms Leong says that the housing insecurity created by the current housing market is unacceptable.

“All levels of government should be doing much more to provide subsidised public housing. For more than 100 years, government funded public housing has been available to low income earners in NSW, but with successive Labor and Liberal governments we’ve seen underinvestment and growing waiting lists,”
she said.

City West Housing, one of Sydney’s largest housing companies, constantly witnesses individuals who are experiencing ‘housing stress’ due to unaffordability.

A spokesperson for City West Housing further agrees with Professor Pawson, noting that “housing affordability is a nationwide issue that federal, state and local governments are all working to address.”

While certain areas have a higher market price, including city dwellings, they feel it is important for everyone to have equal access.

“We provide affordable rental housing for key workers in the City of Sydney area – people on low to medium incomes and who need to live near their workplace,” they said.

Professor Pawson believes people have been forced into renting due to Sydney’s housing crisis.

“For growing numbers of people [renting] is a necessity – people locked out of owner-occupation by unaffordable prices,” he said.

According to Senator Rhiannon, the 2017 budget measures provide “no meaningful solution” to the housing crisis and will make it even more difficult for students and those on income support to enter the housing market.

“The Turnbull government’s failure to use the budget to phase out the capital gains tax discount and negative gearing shows the Liberals and Nationals are not serious about making housing affordable for all.

“The proposal for prospective first home buyers to divert their savings into their super accounts will likely prop up already skyrocketing prices. Funding for homelessness services and public and community housing has only been maintained in real terms,” she said.