Aussie city reaches 14-year low outlook,
Sydney is sinking further into the housing crisis, while the rest of Australia is experiencing growth in building activity.
According to a new report from Housing Institute Australia (HIA), there is no sign of a “near-term rebound” in home construction.
HIA senior economist Matt King explained that new home building in the Sydney basin remains exceptionally low.
This is largely due to high land prices, as well as the ongoing burden of excessive housing taxes and infrastructure charges.
In contrast, Western Australia saw a remarkable 60% increase in building approvals, signaling a positive trend for the region.
Similarly, Queensland experienced a 24% boost, while South Australia saw a 16% rise in building activity.
Sydney’s West and South West, once a prime destination for first-home buyers and new development, face a severe supply crisis.
According to Ray White Commercial (RWC) Western Sydney, monthly approvals in NSW dropped to a 14-year low in September.
In that month, only 662 dwellings were approved, signaling a concerning decline in housing construction across the region.
Currently, there are 5,310 apartments under construction in Western Sydney, but 24,178 new dwellings are needed annually through 2041.
This gap is necessary to meet both population growth and the region’s increasing housing demands.
RCA Western Sydney highlighted the South West precinct as experiencing significant growth, with approvals increasing by over 5,000 dwellings in just six months.
However, these new projects are still several years away from completion, with some expected to take more than five years.
Despite these long timelines, Western Sydney’s housing demand is projected to remain high due to its affordability for first-time buyers.
In fact, 28,358 first-time buyers entered the NSW market in the past year, showing strong demand despite affordability challenges.
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RWC Western Sydney pointed out that the average loan size in NSW is now approximately $800,000, aligning with stamp duty exemptions.
These exemptions are playing a significant role in making homeownership more accessible for new buyers in the state.
Peter Vines, managing director of RWC Western Sydney, noted that the demand for homeownership is strong but affordability pressures are increasing.
As a result, many buyers are being pushed further west to find more affordable housing options.
“Western Sydney is only at the beginning of its growth trajectory,” Vines continued.
However, he emphasized that it’s crucial to meet the growing demand with affordable and accessible housing options in the region.
