In 2024, the NSW Productivity Commission warned that excessive housing costs were driving younger residents out of Sydney, resulting in a “brain drain” of 30- to 40 year olds.
The NSW Productivity Commission found Sydney lost about 35,000 people aged 30-40 between 2016 and 2021.
This week, Cotality released its September quarter housing affordability report, which highlighted the absurd unaffordability of Sydney, both to purchase and rent.
Turning to house prices first, Cotality showed that Sydney is easily the most expensive housing market in the nation.
Sydney’s median home price relative to median household income was an absurd 10.0 in the September quarter of 2025, which was actually down slightly from its peak of 10.2 in the first quarter of 2022.
The amount of income that a median Sydney household must spend to service a new mortgage on the median-priced home was 54.5%—the highest in the nation—but down from the peak of 58.2% a year earlier thanks to the RBA’s three interest rate cuts:
Five years earlier, in the September quarter of 2020, the median Sydney household only needed to spend 32.9% of their incomes to service the mortgage on a median-priced home.
The situation is arguably worse in the rental market, where the median advertised rent has soared by 42% over the five years to Q3 2025, adding $12,300 to the annual cost of renting for the median Sydney tenant.
As a result, the percentage of income required to service rent on the median Sydney home was a record high of 33.7% in the September quarter, up from a low of 27.5% in the December quarter of 2020:
Given the diabolical housing affordability data presented above, is there any wonder why families are leaving Sydney?
Maybe policymakers don’t care because they are more than replacing the lost residents with overseas migrants. As illustrated below, NSW’s population expanded by 101,800 in the year to March 2025, driven almost entirely by net overseas migration of 96,800. The departure of 26,600 residents to other states was almost fully offset by net births of 31,600:
In fact, over the three years to the March quarter of 2025, 98,600 residents left NSW for other states, more than offset by 454,500 net overseas migrants:
With immigration forecast to remain indefinitely high and housing affordability worsening, incumbent families will continue to leave NSW.
Rather than slashing immigration, the NSW Productivity Commission’s brainiac solution is to cram Sydneysiders into high-rise shoeboxes by deregulating housing supply to allow for the construction of higher towers, smaller apartments, less storage and natural light, smaller balconies, and fewer car spaces:
As a result, Sydney is projected to transform into a high-rise shoebox city that is increasingly unsuitable for raising children.
Why wouldn’t families leave?
