Sydney families flee due to staggering average cost of houses

News.com.au

6 hours ago

It's the huge cost of buying a home in Sydney that's sending families fleeing Australia's largest city and as interest rates tumble, it's a problem that's about to become even worse.
According to the latest predictions, the median house price in Sydney is forecast to jump by another 7 per cent in 2025-26, to a staggering $1.83 million.
That's nearly twice the value of the average home in Australia, which has surpassed $1 million for the first time, according to the Australian Bureau of Statistics.
Those figures mean that the typical house price in Sydney will rise by $112,000, which is more than the average full-time worker earns before tax ($103,000).
By comparison, the median house price in Melbourne is tipped to rise by 6 per cent, to $1.1 million. However, that's after two years of downturns in the Victorian market.
As business leaders, economists and political leaders gather in Canberra for Treasurer Jim Chalmer's economic roundtable, it's a question that is at the heart of the push to overhaul planning approvals to build more houses and even consider new options including modular homes.
Finance Minister Katy Gallagher was hit with the big question on Monday morning, conceding it is a huge problem.
'By mid-next year the median house price in Sydney, according to forecasts, is expected to hit $1.8 million,'' ABC host James Glenday said.
'The median full-time worker earns about $90,000. How can people under the age of 40 get excited about productivity and making the economy efficient when they can't afford to buy a home?.'
Senator Gallagher said the problem was longstanding.
'That is exactly the discussion that needs to be had around housing and for us it is around the fact that we haven't built enough houses for decades in this country and the fact we have to look at how we speed that up and how we offer a range of housing options for people,'' she said.
'Whether that be from looking at how we deal with the supported housing sector or affordable housing all the way to home ownership.
'We went to the election with policies around that. There is more work we have to do. It takes too long to build a house. That adds to the cost of housing. We have to make sure we are tackling these issues, otherwise these problems will continue.'
For many Australians, it's a case of voting with their feet.
According to the Muval's Family Relocation Report — based on over 41,000 family moves across Australia over the past six years — there are now more families leaving Sydney than moving there.
Despite huge flows of migrants, Sydney City and Inner South with a netâ€'negative family migration of 0.18, followed by Melbourne Inner (0.23), Sydney's Eastern Suburbs (0.32), Parramatta (0.42) and Inner West (0.45).
'Greater Sydney has experienced the highest loss of families, with a ratio of just 0.31, meaning that for every family that moved in, more than three have moved out,' the report revealed.
'This may reflect the city's soaring cost of living, rising property prices, and a growing desire among families for more space and less congestion.'
All of the regions where more families are moving out than moving in were in Sydney, Melbourne and the ACT.
'Meanwhile, affordability pressures are driving major shifts in ownership: nearly 17 per cent of families are going from owner-occupier to renter, while just 6.3 per cent are moving in the opposite direction — a stark reminder of how tough homeownership is becoming for many.'
Last week, a leaked Treasury document revealed a number of recommended outcomes for the federal government's productivity round table.
The pre-written list, prepared for cabinet, revealed advice from the Treasury to pause changes to the National Construction Code.
It also recommends measures to speed up housing approvals, including a national artificial intelligence plan to cut environmental red tape.
A suite of reforms is designed to clear a backlog of 30,000 housing approvals currently being assessed under the Environment Protection and Biodiversity (EPBC) Act.
The Housing Industry Association (HIA) has urged Treasurer Jim Chalmers to take urgent action.
The HIA's submission to Treasury highlighted the taxes and charges on a typical house and land package in Sydney can now exceed $500,000 adding huge imposts on family mortgages.
'The Treasurer's roundtable presents a critical opportunity to address the barriers that are holding back new housing supply. You cannot talk about productivity, economic growth or improving living standards without discussing housing,' HIA managing director Jocelyn Martin said.
'Red tape, regulation and delay are adding enormous costs to the delivery of new homes. If we want to see real reform, we need to boost productivity in our industry, cut the burden of unnecessary building and planning rules, and start making it easier to build homes.'