Sydney must embrace higher-density living to meet demand

With Sydney’s population on the rise and forecast to reach 6.42 million by 2036, the capital city may soon be forced to build more higher-density apartments to cater for the growing housing demand as urban sprawl is set to decline.

Sydney is already undersupplied by approximately 100,000 houses and with the population expected to reach 6.42 million in just 20 years, Sydney will require an estimated 726,000 new dwellings to cater for this growth.

Sydney geographic restrictions

Due to Sydney’s geography, finding areas to build residential housing is becoming increasingly more difficult with the harbour, waterways and mountains in the way. Because of this, urban sprawl occurred with more people moving out west and down south to find more affordable homes to live in, compared to the inner city areas. However, new data has been released to show that even the Sydney basin is now nearing capacity.

In fact, there are just 340,000 potential housing lots left throughout the Greater Sydney basin, well under half the number required to house Sydney’s forecasted population.

The analysis was conducted by Charter Keck Cramer strategist research principal Toby Adams who stated, “Demand is extremely strong for both [houses and apartments], as quickly as the lots are being put to market they’re pretty much being snapped up.”

The analysis of the available land took note of the Illawarra and Lower Hunter region; however, it did not include the Central Coast. Much of this land however is already held within fragmented ownership, and only a small proportion of this is for new development due to the requirement for rezoning and new infrastructure.

Available greenfield areas too far from Sydney CBD

The problem that Sydney has is that there are greenfield areas that can be developed on such as south-west past Liverpool and Campbelltown, but these areas are far from the Sydney CBD. You are looking at journeys of at least 50kms or even up to 70kms to the city, which would mean extremely long commutes for Sydneysiders.

You also have the issue of infrastructure and transport. Not all areas are linked by road or trains, and these need to be established first with core amenities if anyone is to live here. And those that are already in existence are starting to struggle to handle the increasing number of vehicles on the roads or commuters on trains and buses.

Secondary City Centres could be established

It is much more likely that suburbs such as Liverpool and even Penrith will follow Parramatta’s lead and become a secondary city centre, with more high-rise developments of 30 to 40 levels, retail, employment, schools and amenities to appeal to the local population. Both Liverpool and Penrith already have a large amount of core amenities in place, and it makes sense for both of these to adapt to a more higher density city living lifestyle.

Instead of having to travel all the way to the city for work, retail or dining opportunities, residents of these secondary city centres can live, work and thrive here instead.

Chatswood is a major CBD, as is Parramatta which is already going through a vast regeneration and is set to become an increasingly more important CBD in the Western Sydney region. Many residents close by will find employment opportunities here instead.

Higher density living to become the new norm

Sydneysiders will also need to get used to the idea of higher density living, with less focus on detached housing due to the ever-growing need to utilise vertical space as land area is becoming increasingly undersupplied and even more expensive. The Australian Dream of owning a house on a quarter of an acre block with a backyard is now changing. People want convenience and amenities close to hand. Nobody really wants to be travelling hours a day for employment, although many Sydneysiders are already having to do this.

Lifestyles are changing

Lifestyles are definitely changing particularly Generation Y and for Generation Z and if we want convenience at our doorstep, particularly good transport connections and live within a vibrant city then apartment living needs to be embraced. However, this doesn’t mean living in tiny boxes. High density living can be done well, with outdoor living areas or green parks close by, making this a more attractive residential housing option.

Many apartment developments today have lifestyle conveniences on site such as gyms, swimming pools and rooftop retreats. This not only appeals to renters and buyers, but it also makes selling apartments with facilities much more attractive in the future.

Practical issues first need to be addressed

However, there are practical issues that need to be addressed. Schools are already at capacity, whilst major roads are heavily congested with commuters facing long delays every day. It is important that the city addresses these problems if it is to effectively house another 1.42 million people in the next two decades and make Sydney a liveable city.

Sydney is one of Australia’s most important capital cities alongside Melbourne and to keep it as a global contender then it is essential that Sydney addresses this housing demand if it is to cater for the anticipated population growth.

If you are looking at purchasing a property in Sydney, whether as an owner occupier or investor, then there are still areas of Sydney that are experiencing levels of growth. To find out more, it’s best to speak to one of our expert Property Consultants who will be able to guide and assist you further.

You can also speak to our Property Consultants about Sydney being undersupplied and what this means as an investor.

Call us today on 1300 123 463.
Published on 26th of September 2016 by Marty Stanowich
Marty Stanowich
Marty Stanowich


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