Study finds Sydney housing unaffordable on median income until at least 2030s

A new study by researchers from the University of Technology Sydney and UNSW Sydney has found that Sydney’s housing market is unaffordable for those on median incomes, with the situation likely to persist until at least the 2030s.

Key findings of the study include:

No areas in Greater Sydney are affordable for buyers on NSW median part-time ($600/week) or full-time ($1500/week) incomes alone.
Even full-time workers would need additional income sources, such as existing wealth or family gifts, to afford property purchases and mortgage repayments.
The study predicts this situation will continue until at least 2031 without significant interventions.
Housing affordability decreases closer to Sydney’s central business district.

Professor Chyi Lin Lee from UNSW’s School of Built Environment, a senior author of the study, emphasized the severity of the crisis:

“While we expected the issue of housing affordability to be severe for part-time employment, we found that full-time employees are also significantly affected,” Lee said. “This highlights the widespread housing affordability crisis and the need for comprehensive policy solutions.”

The researchers developed an affordability index based on likely mortgage repayments, assuming a 20% deposit, average lending rates, and a 30-year loan term. They defined affordability as spending no more than 30% of income on housing costs.

The study also noted potential consequences of this affordability crisis, including:

Limited chances of homeownership for those relying solely on earnings
Increasing reliance on family support (“Bank of Mum and Dad”) for first-time buyers
Growing polarisation between housing sub-markets
Potential for housing-induced poverty

Professor Lee called for significant housing reform, suggesting a combination of supply-side and demand-side policies:

“Currently, the focus has been on demand-side policies, such as the First Home Owner Grant (FHOG),” Lee said. “However, the government should consider doing more to address the supply side in the immediate term.”

Suggested interventions include increasing affordable housing construction and implementing broader inclusionary zoning policies to incentivize developers to allocate more units to low and moderate-income households.

The study was published in the journal Cities and is the first to examine the link between housing affordability and employment contracts.