NSW Treasurer blames wrong housing affordability culprit


NSW Treasurer Daniel Mookhey warned that failing to act quickly on housing affordability could send Sydney down the same route as San Francisco, where middle-class professionals with suits and iPhones are queuing for food and living in homeless shelters.

Mookhey claims that Sydney needs a massive boost in high density apartments, spruiking the government’s plan for widespread high-rise rezoning, which will permit six-storey towers within 400 metres of more than 30 of the city’s train stations from April.

“If we want to have an egalitarian middle class in the future then we have to interrupt that trend and make sure we aren’t inadvertently creating another landed gentry”, Mookhey said.

“Homelessness is claiming the middle class in San Francisco… That is creating great stress to their social cohesion”.


Mookhey is right to be concerned.

Sydney’s rental affordability is abysmal:

Sydney median rents

The cost of buying and paying off a home in Sydney is also extortionate, with Sydney’s median house price hitting a record high $1,595,310 at the end of 2023:

Sydney median house price

The average loan size in NSW is also the highest in the nation at nearly $800,000:

Average loan size

Source: ABS

Independent economist Tarric Brooker posted analysis on Twitter (X) showing what proportion of a mortgage on a median-priced Sydney house someone earning $200,000 could afford, adjusted for inflation:

Sydney housing affordability

Source: Tarric Brooker

“In 1998, this hypothetical household could afford 1.93 median house mortgages”, noted Brooker.

“As of the latest data this household can only afford 0.71 mortgages”.


“This illustrates nicely the reality of high housing prices. In the late 90s and very early 2000s, this household could have had a palatial home”.

“In 2024, they can’t even comfortably afford the median”, concluded Brooker.

However, Mookhey’s framing of this issue as a supply problem is disingenuous when the federal government is busy fire-hosing Sydney with people via net overseas migration:

NSW population growth

Scott Phillips hit the nail on the head with the below Tweet:

Scott Phillips Tweet

“We could rezone, build, go up, go out, add more infrastructure (transport, dams, sewage)… or just take in fewer people”, Phillips said.

“The knots you have to tie yourself in, to avoid that simple and obvious answer, in favour of ‘just build more’ (at an unspoken cost) is astonishing”.


“And yet, here we are”.

“The pollies truly don’t care (or are being told to pretend they don’t). It’s madness”.

“Imagine how much of that could be averted by limiting population growth”.

“The NSW Treasurer is right about the implications, by the way”.

“Just not about how we should prevent/solve for it”, Phillips said.

In the decade to June 2023, NSW added 935,315 people with 791,944 or 85% of this growth coming from net overseas migration. Most of this growth obviously landed in Sydney:

NSW decade population change

Sydney’s population is also projected to grow to around nine million people by the 2060’s on the back of permanently high net overseas migration.

NOM projection

So long as Sydney’s population grows like a science experiment via mass immigration, the city’s housing shortage will worsen, and house prices and rents will climb.

Anyone with common sense can see that the primary solution to Sydney’s (and Australia’s) housing shortage is to limit immigration to levels below the capacity to provide high-quality housing and infrastructure.


Otherwise, the housing crisis will be permanent.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.