Why downsizing could solve Sydney’s housing undersupply
According to a study by the Department of Planning and Environment, more than half a million homes have at least two empty bedrooms, of which the majority are occupied by “empty nesters” or singles over the age of 50.
This is equivalent to 20 years housing supply which Sydneysiders could be utilising instead.
With many first home buyers in Sydney in particular struggling to get on the housing ladder due to the soaring property prices, and an undersupply of property, something drastically needs to be done to meet this growing property demand.
Downsizing could solve Sydney’s housing supply
One idea that has come from this research is for these empty nesters and singles living in three or four bedroom houses to downsize into something smaller. This will then free up these larger dwellings for young families with children.
The study stated that couples who remained in larger homes involuntarily effectively prevented the “freeing up of larger homes for the next generation of families.”
However, not everyone wants to move into an apartment. According to NSW Planning Minister Rob Stokes, "We need to find ways to make it easier for people who want to downsize to do so”. Building more townhouses like those in Redfern further out west could help.
A lack of suitable housing options available A survey commissioned by the Department of Planning also found that many people “would love the opportunity to downsize”; however, there is a lack of housing options that are senior-friendly and this is stopping many from downsizing.
The 2011 census figures show that approximately 1.8 million bedrooms were unused throughout Sydney every day. This worked out as 20 years’ worth of housing supply based on 30,000 new housing completions each year.
The latest housing data also shows that medium-density housing accounted for just 10 per cent of all housing approvals in the last 12 months.
Downsizing could reduce pensions But it’s not just a lack of suitable housing that is stopping this demographic from downsizing. Another reason stopping many empty nesters and older Australians from downsizing into a smaller home is that by selling their larger expensive home and buying something cheaper, this could reduce their pension significantly, especially if they are relying on their home.
Although Sydney needs to increase its housing supply to meet a growing population demand, diversity is also important, with a sheer lack of certain housing types in some areas of Sydney. According to 2011 census data, the average NSW household is 2.6 persons and the household size has shrunk since the 1970s. Youngsters are moving out of home earlier and families are also having fewer children, whilst there are more retirees. There is a high demand for smaller housing types from both retirees as well as Gen Y.
More terrace-style homes required for middle ring suburbs Within Sydney’s middle suburbs there is a shortfall of smaller residences. Mr Stokes is therefore encouraging more terrace-style homes for inner Sydney outwards to the middle ring. This area includes suburbs from the northern beaches all the way to Parramatta and south towards Botany Bay. The study also shows that this where many older residents in half empty homes were also situated.
The study also found that within Blacktown, The Hills and Ku-ring-gai, over 70 per cent of residents were aged 65 years or over and their homes had a minimum of two empty bedrooms.
The minister has announced new draft design guidelines to help fast-track approvals for terraces and townhouses.
What are the benefits of downsizing? So what are the benefits of downsizing? By moving from a larger home into something smaller you can benefit from the following:
1. Less maintenance A smaller property will be easier to maintain due to less cleaning and tidying. An apartment might just have a balcony or courtyard area which means that you don’t need to mow the lawn, plus a smaller home will mean you can get rid of all that clutter you have stored up over the years. You will spend less time doing chores and more time doing the things that you love!
2. Less repair work Moving into a smaller property that is new will also require less repair work. Your appliances will be brand new meaning that it is unlikely you will have to replace these for a good number of years.
3. Close to public transport and amenities Apartments generally are situated close to public transport and core amenities such as retail, dining and parks so you don’t have to travel too far to access everything you need.
4. Lower power bills A smaller home will also mean that you will save money in power bills. You don’t need to heat or cool down a whole house and depending on the aspect you can enjoy plenty of natural sunlight streaming through all year round.
5. Its’s new If you buy off the plan, then the property is brand new. No one has lived here before and you can furnish it however you like. Downsizing can therefore represent a fresh start.
To find out more about downsizing or how you can get on the property ladder, get in touch with the iBuyNew team today. Give our Property Consultants a call on 1300 123 463.
Published on 28th of November 2016 by Marty Stanowich