A lesson in how not to solve Sydney’s housing affordability crisis
A lesson in how not to solve Sydney’s housing affordability crisis
It’s like ‘trying to put a bushfire out with a hose’
Sydney welcomed 31,000 new homes in the 12 months to October, the New South Wales (NSW) Department of Planning announced Thursday. This is apparently the most number of new homes to arrive within a year in over four decades.
The emergence of the new dwellings puts the NSW government closer to its goal of addressing the housing backlog across the state, according to Planning Minister Rob Stokes.
“By building a simpler, more efficient planning system, we’re working to improve housing supply and choice to help people get into the market,” said Stokes.
More homes have not translated into lower Sydney prices, however.
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Housing affordability is one of the hottest-button issues gripping the country’s largest city. According to Domain, the median house value in Sydney currently hovers at AUD996,000 (USD736,900).
Academics and government officials are at loggerheads on the best way forward to navigating the crisis. Augmenting the supply alone won’t douse overheating home values in the city and would be akin to “trying to put a bushfire out with a hose,” Peter Phibbs, head of urban and regional planning at the University of Sydney, told the Sydney Morning Herald. “We’re at 40-year highs [in building completions]and it hasn’t generated any significant benefit.”
Although Stokes “had done everything right,” Phibbs said the Australian government should take a more federal approach to addressing the affordability crisis via taxation measures.
In a speech to the Committee for Economic Development last month, Stokes railed against the practice of negative gearing and its role in the crisis. “Why should you get a tax deduction on the ownership of a multimillion-dollar holiday home that does nothing to improve supply where it’s needed?” he said.
The NSW government doubled stamp taxes in June and will be introducing a 0.75 percent land-tax surcharge next year. The levies stand to net the state government more than AUD1 billion (USD739 million) in revenues within four years.
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Source: Property Report