Last year’s NSW Budget noted that the state’s housing shortage had disappeared due to the collapse in immigration:
Building approvals are now running well ahead of the change in population, which is depressed due to the lack of inward migration. This suggests a potential oversupply in the near-term relative to the underlying demand for housing (Chart 2.13).
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Now the Property Council is warning that Greater Sydney is facing “an underlying deficit of housing supply” amid the city’s growing population:
The Greater Sydney Commission’s Greater Sydney Region Plan 2036 (GSRP), identified a need for 725,000 new homes across the region to house Greater Sydney’s population from 2016 to 2036. The Plan identified delivery of a minimum 36,250 dwellings every year in Greater Sydney to achieve this goal In 2019 DPIE released revised population projections, which provided updated implied dwelling requirements for all Greater Sydney LGAs to 2041. The revisions mean one million dwellings are needed in Greater Sydney by 2041 an increase of over 250,000 dwellings.
The revised demand to 2041 has increased the number of dwellings required to be delivered by the region each year, rising from 36,250 dwellings per annum to 40,000 dwellings per annum. As a result, housing delivery in Greater Sydney will need to increase to maintain sufficient delivery to meet the revised demand…
Since the GSRP was published, Sydney has meet or exceeded the annual requirement 2 times, 2017-18 and 2018-19.
Following 2018-19 the number of homes completed in Sydney has dropped. In 2020-21 the number of new homes completed in Sydney (29,785) dropped below 30,000 for the first time since 2014-15…
If Greater Sydney continues to deliver under the annual targets there is a risk of a significant undersupply by 2036. As an example, if completions remain at around 29,000 dwellings per year (as was completed in 2020-21), there could be an undersupply of 80,000 dwellings by 2036…
“In order to keep pace with future demand, Western Sydney requires the delivery of 25,530 dwellings per year – and we are presently 6,000 homes short of this number,” [Property Council’s NSW Executive Director Luke Achterstraat said]…
Let’s get back to basics here. Sydney’s, and indeed Australia’s, ‘housing shortage’ could be permanently solved with the stroke of a pen by the federal government. All it needs to do is reduce immigration back to historical pre-2005 levels. This would also negate the need to bulldoze our suburbs into high density.
Mass immigration will deliver a never-ending housing shortage.
Any housing shortage problem is really an excessive immigration problem. Not that you will ever hear the property lobby nor our captured politicians and media admit it.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also Chief Economist and co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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