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“We hope that supply will increase so that the unaffordability situation will ease and improve. Right now there is a lot of demand and limited supply, which is further pushing up prices. When supply increases, the market will cool down and prices will decrease or at least remain the same, making properties more affordable.”
But Professor Nicole Gurran, an urban planner and policy analyst at the University of Sydney who was not involved in the study, questioned whether housing supply would actually grow enough to alleviate the crisis. She questioned whether the government could meet its targets for new housing in NSW over five years using the $10 billion Australian Housing Future Fund.
“You’d need some very bold and optimistic modeling to come up with something different than the housing unaffordability trends of the last few years,” Gurran said. “The first question is, are we going to see that much new housing?
“And then you remember that before Covid, the private sector was doing 99 per cent of our developments, and indeed almost achieving that target, certainly with approvals through the planning system. But prices were still continuing to rise. So it’s hard to expect that prices will come down and become more affordable because of new housing development.”
She said the only real answer was a different approach to housing provision, including public, social and affordable housing and build-to-rent, as well as through pension companies and shared equity models.
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Meanwhile, inherited wealth or cash gifts from family will remain many people’s only hope of buying a home on a single income, the research found.
To make matters worse, the percentage of part-time workers increased from 20.6% to 23.6% as of May 2021, with an average salary of $600, making this segment of the population even less likely to enter the housing market.
Lee said the main solutions are for governments at all levels to build more housing, speed up the development of affordable housing, and revise zoning and increase incentives for developers to provide more social and affordable housing.
“Supply needs to increase with medium-density housing to increase the number of homes, particularly in areas close to the city, close to where jobs are,” he said. “It’s not an ideal situation that people can only afford to buy property further away from Sydney.
“We also need to provide more choice for people, with smaller, more affordable properties for people on lower incomes.”
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