Finding an answer to Sydney’s affordability question

The-City-of-Sydney-is-trying-to-solve-the-affordability-riddle-_157_6006719_0_14102526_300Housing affordability has raised serious questions in past years. As investors have scoured Sydney to find profitable property, there have been some concerns that certain segments of society – like first home buyers – are being pushed out of the market.

Fortunately, local governments are listening. The City of Sydney sought to find answers in a March 12 forum, working with industry experts, community representatives and the general public to workshop how to provide more affordable homes for all Sydneysiders.

Lord Mayor Clover Moore said that while the housing market has played an important role in buoying Sydney’s economic success, she also pointed out that more needs to be done to make sure that housing is accessible for the whole community – particularly essential workers and members of the emergency, retail and hospitality professions.

According to SQM Research, house prices were up 7.8 per cent over the year to the week ending March 10, but Ms Moore emphasised that 84 per cent of low income earners pay 30 per cent or more of their income towards repaying the mortgage.

“Housing is one of the foundation stones of a cohesive, equitable and successful city. It is vital to our economy, to our diversity and our social harmony,” she said.

Ms Moore noted that the City has already made significant efforts towards providing more affordable housing for residents. Some examples are the Ultimo-Pyrmont Affordable Housing Levy and the Green Square Affordable Housing Levy, which were both introduced in the 1990s. As well, she said that over the five years to June last year, the council introduced 8,000 more dwelling into the property market.

Is policy the answer?

Her words reflect those of many other industry bodies, who have been calling for local governments to take the lead on providing affordable housing. The Real Estate Institute of New South Wales (REINSW) is just one of these voices. In a March 11 statement, REINSW President Malcolm Gunning said planning improvements are not the only changes that needs to be made – the state government needs to grasp the affordability issue with both hands and remove restrictive policies.

“The Government has made real estate a major issue for the State Election, however they are unfairly profiting every time a property is transacted by allowing outdated transfer stamp duty taxes to remain in place,” he said.

Affordable housing is something that effects all members of the property market, and policy changes can have a significant impact on how it operates. These discussions highlight how important it is for potential investors to keep their finger on the pulse. As pressure for change mounts, it might be a good idea to get in touch with your local real estate agent about how adjustments to policy might affect your portfolio.

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