Sydney Housing Prices Prevent Young Workers From Finding Urban Accommodation

While reports of housing problems in the United States are fairly commonplace, ranging from expensive property costs to suburban withdrawal, we rarely hear about similar problems in other nations. However, it appears that the U.S. is far from the only country battling rising house prices and other issues: critics in Sydney, Australia are reportedly concerned that a lack of affordable housing options may prevent young people from accessing opportunities in urban areas, particularly in one of the country’s most famous cities.

In an editorial for the Sydney Morning Herald, Eamon Waterford discusses recent statements Glenn Stevens, the Governor of the Reserve Bank of Australia, made about the nation’s increasing house prices. While Stevens was most concerned about the potential of a detrimental correction occurring in the future, Waterford, the Director of Youth Action, focused on the rising population of young professionals, many of whom are unable to afford housing in Sydney. Because of this, Waterford stated, the economy may be threatened due to a lack of creative, productive workers.

The problems Waterford lists in Sydney are not uncommon for large, popular cities: high rent prices make it difficult for many young people to independently afford apartments and requires them to dedicate more of their paycheck to housing costs rather than investing in the local economy. However, the rate at which Sydney’s housing costs are rising is dramatic: while Waterford reports that a generation ago, it was possible to buy a home for three times the average salary, he states that it now takes more than nine times the average income to purchase a home in the city.

As in many places, homes are less expensive on the outskirts of the city. However, this can often mean driving as many as 80 miles from the center of town, creating serious long-term problems. Waterford reasons that this can cause young workers to spend as much as 20 hours a week commuting from the suburbs, a practical consideration that could drive these productive employees to look for opportunities elsewhere. Moreover, due to the lack of affordable housing, vital workers such as nurses, teachers, and firefighters may be unable to find housing that allows them to quickly reach the areas that need their services.

Waterford is therefore calling for a broader range of housing options in key locations, including apartment buildings, low-income housing, and homelessness services in the inner city. With housing delivery halved, the lack of these options is believed to push younger workers into competition with older residents, including those looking for investment opportunities.

The concerns listed in Waterford’s editorial have resonated with many people around the world, including some in the United States.

Waterford writes that he expects a significant amount of criticism for his proposal will come from current property owners, who want their homes to increase in value and can benefit from controlling supply. However, he points out that the city is quickly becoming a city for aging or retired millionaires, which limits diversity and prevents sustainable growth. Without a varied supply of workers, he writes that Sydney could lose its productive capability and therefore its position as a high-demand area, causing housing prices to lose value. Because Sydney currently generates as much wealth as Australia’s entire mining industry, this change could have a significant effect on the nation as a whole. Whether the city will follow Waterford’s advice has yet to be seen, just as the United States awaits many similar conclusions.

Leave a Reply

Your email address will not be published.