Sydney’s housing affordability challenge

Sydney is now the world’s 6th most unaffordable city.

Father and son happy
Reading time: 6 min

This comes from a new report by Sydney-based thinktank ‘Committee for Sydney’. According to this report, Sydney now suffers from ‘chronically unaffordable housing’ - with the persistently high cost of owning or renting a home in the city restricting the living and working choices for a significant portion of the city’s residents.

Renters and new homeowners are bearing the brunt of this squeeze. More than 33% of renter households are in housing stress, with Sydney’s rental market unaffordability now on par with the notoriously expensive markets of San Francisco and London. Young and recent homeowners are similarly feeling the pressure, with mortgage repayments as a percentage of income growing to above 30%, putting this figure similarly on par with notoriously unaffordable Canadian cities such as Vancouver or Toronto.

For the average Sydneysider, this reality is no stranger. Sydney now ranks among the top 15% for its share of local people who view access to affordable housing as one of the main challenges currently facing the city. This figure is growing as the economic impact on the city grows more tangible and severe by the day – with Sydney’s chronic housing unaffordability crisis costing the economy more than $10 billion per year.

This presents in a number of ways, but most significantly in its impact on talent, innovation and productivity. Many businesses, for example, have begun to lose current and prospective staff across a range of incomes and skills due to workers being unable to afford housing in the city and unwilling to commute from increasingly far out. If unchecked, Sydney could follow in San Francisco’s footsteps – which has seen a net loss of more than 100,000 households over the last 4 years and with graduate retention 10% less than other comparable cities.  

The report concludes that Sydney’s housing unaffordability challenge has “very clearly … worsened over the past decade” and solving and addressing this issue will require continuous investment, innovation and co-ordination across the economy. This naturally takes time, and pressures are likely to continue tightening before they get any better.

But what can be done to help those in need now?

Acquiring the right property has historically been one of the primary methods to maintain financial security – especially when other markets may be uncertain. However, with cost-of-living pressures exacerbating chronic housing pressures, getting a foot on the property ladder with a good asset is both increasingly important and increasingly out of reach. Now, more than ever, people may need a bit of help to achieve personal financial freedom.

This is where Inviva may be able to help.  The financial experts at Inviva created Equity Empower – a flexible reverse mortgage designed to help over 55s release equity in their properties to fund their own lifestyle needs or to help their children. The loan can be used by parents to gift or loan financial support to children to give them the boost they may need to get into the property market today.  

With no fixed term, no restrictions on repayments, and the option to drawdown funds as and when you need them makes Equity Empower a viable alternative to parental guarantees to help children on to the property ladder. And, as making a large financial gift is a decision that needs to be approached carefully, Inviva offers free educational resources and a Parents and Kids calculator to help families make informed decisions and set the Bank of Mum and Dad up for success.

To find out more about Inviva's equity release loans, click here.

Save For Later

You May Also Like

Share this!