The Big Picture: what the housing crisis means for you

In a city celebrated for its vibrant life and economic opportunities, Sydney’s escalating housing affordability crisis casts a long shadow.

Recent reports, including CoreLogic’s Home Value Index (HVI), underscore a harsh reality that many Sydney residents are being priced out of their home city.

Against a background of these figures, ALAND continues to address Australia’s housing challenge by creating stylish, modern and affordable residential developments where they are needed most.

How the crisis affects Sydney

Data from the NSW Productivity Commission reveals a growing exodus of people from the capital. Between 2016 and 2021, approximately 70,000 people aged 30 to 40 left Sydney, largely due to the cost of housing.

This exodus threatens Sydney’s aspirations as an international business hub, a sentiment echoed by NSW Planning Minister Paul Scully, who is concerned about the long-term economic consequences of this trend.

“People are packing up and leaving Sydney,” he said. “You end up losing that great talent in that key working age demographic. How does that reconcile with our desire to be a leading global city? It doesn’t.” [1].

The shortfall in new housing has prompted leaders, including NSW Premier Chris Minns, to call for significant increases in construction to meet the national target of 1.2 million new homes by 2029, despite labour shortages and rising costs in the building industry. [2].

Mr Minns says the federal government will need to bring in thousands of foreign workers if NSW is to have any chance of building the 75,000 new homes required to meet the 2029 targets set by Canberra.

“We have got major supply constraints when it comes to new home builds in NSW and we need help particularly in construction across the state,” he said. “I think it’s pretty reasonable for NSW to say that we need to be a priority because we need to roll out more housing.”

Further exacerbating the situation, the latest ANZ Housing Affordability report indicates that housing affordability is at its worst in over two decades, with the average income portion needed to service a new mortgage in Sydney soaring to an unprecedented 74.4% [3].

Eliza Owen, CoreLogic head of research, says the deteriorating rental situation in Sydney was making it even harder for young people to save for a deposit – an essential step for anyone who wants to buy.

“First-home buyers are arguably in the most challenging position. They face an increase in the deposit hurdle as prices and rents rise, and are more likely to buy with a low deposit, increasing their interest costs,” she said.

Latest housing trends

According to the latest CoreLogic HVI report the national housing market grew by a steady 1.6% during the first quarter of 2024, adding approximately $12,000 to the cost of an average house. [4]

Sydney, in particular, has seen a moderate increase of 0.9% over the quarter, which aligns with a 9.6% annual growth rate.

This uptick reflects a complex interplay of factors, including an undersupply of housing and high demand driven by immigration, which continues to exert upward pressure on home values despite broader economic challenges such as interest hikes and cost of living pressures.

This scenario underscores the critical need for apartment developments which are focused not only on meeting the immediate housing demand, but also ensuring affordability remains a key consideration in the rapidly evolving landscape of Sydney’s property market.

CoreLogic’s research director, Tim Lawless, says the latest figures show that the highest demand is now in the affordable sector, which is now facing pressure from first-home buyers and downsizers alike. [5]

“With housing affordability becoming more challenging and borrowing capacity lower than a year ago, it’s no surprise to see demand being skewed towards the middle-to-lower end of the value spectrum,” he said.

How ALAND Is addressing the crisis

ALAND stands out as both a builder and developer, offering strategic solutions to this crisis by focusing on high-density, affordable housing projects in Western Sydney’s key growth areas:

  • Carson on the Park, St Marys: This project has delivered quality housing in a rapidly growing suburb without sacrificing luxury, meeting the needs for affordable living in a crucial area of development.
  • The Gladstone Village, Merrylands: Offering good access to the several business hubs and retail, this development perfectly combines luxury and affordability, plus resort-style amenities and a vibrant community atmosphere. Stage 2 DA has just been approved.
  • Paramount on Parkes, Harris Park: This mixed-use project is a testament to ALAND’s timely delivery, located in the heart of the burgeoning Parramatta CBD, and is supplying crucial housing stock in a high-demand, high-growth area.
  • Schofield Gardens, Schofields: This multi-stage residential community provides affordable and sustainable housing for a wide spectrum of residents in one of Sydney’s fastest-growing regions.

In addition, ALAND has also announced plans for a $276m masterplanned community at 60 Pelican Road, Schofields. If approved the new development will deliver a total of 401 apartments, 66 of which will be allocated to teachers, police officers, nurses and other essential workers.

ALAND CEO George Tadrosse hopes that the new project will help address the urgent need for affordable housing in the rapidly growing Western Sydney region.

“At ALAND, we’re dedicated to creating thriving, inclusive communities,” he said. “60 Pelican Road is a testament to our commitment to high building standards and sustainable living, and we are proud to be offering essential workers quality homes at affordable prices.”

Why integrated development matters

ALAND’s approach as both developer and builder fosters greater buyer confidence, particularly among those purchasing off-the-plan.

Apart from overseeing every aspect of a development’s planning and execution, ALAND’s maintenance program ensures that each apartment complex meets the ongoing demands of owners and residents.

By providing affordable, high-quality housing near schools, shops, transport and other essential services, ALAND is investing in Sydney’s growing built environment and its people – ensuring the city remains a desirable and viable place to live for everyone.

By providing affordable, high-quality housing near schools, shops, transport and other essential services, ALAND is investing in Sydney’s growing built environment and its people – ensuring the city remains a desirable and viable place to live for everyone.

Sources:

[1] AFR

[2] The Daily Telegraph

[3] AFR

[4] CoreLogic

[5] CoreLogic

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