The Big Issue
Wednesday 25 Jan 2017
Well here we are, not only a brand new year, but NSW has a brand new Premier as well. I wish her the very best of luck addressing the issue of Sydney housing affordability. It is a debate that feels almost as Australian as snags on the barbeque so it’s a perfect coincidence that our new Premier should raise it as we prepare to celebrate Australia Day. And you might be surprised to realise that as a Sydney real estate agent I agree: Housing affordability is a big issue.
Affordability was one of the key issues driving the lack of stock available throughout much of 2016. The prospect of great sales results was not enough to motivate potential vendors to list because the prospect of not being able to afford and find a suitable replacement property was all too real.
And Stamp duty certainly plays a significant role in that scenario. Increased property prices means increased stamp duty and the combination of the two has become a significant barrier to people moving.
In 2016 nobody wanted to risk getting out of the market so listed properties were in high demand, competition was strong and prices were driven higher. House values grew by 4.7% across 2016 and apartments by 6.3%.
It is vital to recognise that supply is crucial to driving housing affordability.
Therefore in terms of supply I welcome the prospect of new apartments coming online across the CBD and city fringe areas and more broadly across Sydney. The idea that there is a risk of an ‘oversupply’ of apartments is not one I see becoming a reality anytime soon.
Morton manages over 2600 properties across Sydney and demand is extraordinary. Just prior to Christmas our team leased all 86 properties in a development in Penrith in less than two weeks. We have seen similar demand for a new development just released in Bondi and in Ermington. They are markets as diverse geographically as they are demographically but demand is strong across them all.
There is room for increased supply and real need for increased supply of apartments across the city.
And as we debate the issue of how to address housing affordability also remember not to lose focus on the reality that there is value to the economy and community of maintaining a robust residential property market.