Potential housing shortage for Sydney

Sydney-could-see-a-housing-shortfall-of-more-than-190000-over-the-next-decade-_157_6005497_0_14102158_300With construction soaring to new peaks throughout New South Wales, and Sydney’s population booming, property industry commentators have warned that a lack of supply could undermine the strength of the housing sector. The Property Council of Australia has gone one step further in this regard and forecast that Sydney could potentially see a 190,000 shortfall in houses in the next two decades.

Demand for property continues to swell in the New South Wales capital, but the annual average number of homes has fallen short. The Property Council suggests an average of 31,076 new homes per year would be sufficient to offset population growth, but its research shows the city is short by more than 14,000. This could drive house prices even further out of reach of many households, while fuelling investor demand for capital gains.

In fact, Property Council also initiated housing targets to ensure sustained supply, but the numbers of houses has come up more than 51,000 homes short in the first decade since these were put in place. With Sydney’s population expected to expand exponentially, the deficit could continue to worsen, pushing the shortfall to 56,320 in the next ten years.

Investors and vendors will relish these conditions. Surging prices and a competitive market will likely drive opportunities for capital growth, making Sydney an ideal locale for investment.

However, Property Council Executive Director for NSW Glenn Byres said homebuyers will keep paying the price for lagging supply unless local government pushes approvals through more quickly.

“Councils need to get on with the job of issuing approvals, delivering the housing required to keep pace with population growth and a better planning system is essential,” he said.

“And if we fail to keep pace with demand, we drive up prices and make housing less affordable for the next generation of homebuyers.”

If you want to take advantage of these conditions to add to your investment portfolio, or want advice about selling your home in a competitive market, get in touch with your local agent.

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