This article is from the Australian Property Journal archive
HOUSING affordability issues have been driving young families out of Sydney for the last two decades, with the city losing around 0.5% of its population each year to regional hubs in NSW and other capitals.
Its population size has only been maintained because of inbound international immigration, according to a new report released today by economic research firm e61 Institute has.
Elyse Dwyer of e61 Institute said housing affordability is the prime suspect in the rapid decrease in families leaving Sydney, which has perennially topped house price values nationally with a current median house price of $1.538 million, according to Domain – growing 5.3% over the June quarter.
“Our research found that people are leaving areas where housing prices have risen the fastest. For every extra percentage point that an area’s housing prices grew in the five years to 2016, 0.2% of the population left in the following five years,” Dwyer said.
“Significantly, it was people in their 30s leaving at the fastest rate – the age when young families often need bigger homes. Similarly, people in their 40s are leaving at quite a rapid rate – likely for the same reason – and we’re also seeing people in the 60s leaving Sydney at a fast rate, possibly accounted for by tree-changing and sea-changing retirees.
She said it was important to note that these patterns were occurring well before COVID and are specific to Sydney. She noted that Melbourne experienced a positive influx of 30 to 39-year-olds over the same period.
According to the report, people leaving Sydney were choosing less expensive coastal hubs within commuting distance of Sydney such as Wollongong and Newcastle. They were also moving to the Gold Coast and Canberra.
By contrast, other large capital cities have not had similar population outflows. Brisbane, Canberra, Melbourne, and Perth have all had little domestic out-migration on average, with Adelaide averaging roughly half the outflows of Sydney.
“These trends suggest that big movements of people are happening as a side effect of housing affordability problems. Young people are moving out of Sydney because of a lack of appropriate housing. The movements are an unintended consequence of housing shortages and could negatively influence the future of Sydney,” Dwyer said.
“In essence, if you want to ensure families stay in Sydney, housing affordability is a key issue to be addressed.”
While buying a house is still the biggest financial goal for one in three Australians aged 18 to 31, more than a quarter aren’t confident they’ll ever achieve it, according to Douugh Ltd.
