With housing and rental stress now unwelcome buzzwords across the Beaches and beyond, Peninsula Living Pittwater examines the impact.
Australia’s simmering housing and rental crisis has boiled over on the Beaches, with the area suffering from some of the highest levels of housing stress in the country. As homeowners who paid Pandemic-induced peak prices struggle to contend with rapid-fire rate rises, tenants endure 30 per cent rent spirals, the highest since the Great Depression.
Buyers in Dee Why, which exploded during the Pandemic, have been rocked, and feeling repercussions from taking on mega mortgages via First Home Guarantee deposits, set at five per cent. With Census figures revealing that 20 per cent of Greater Sydney homeowners are suffering housing stress – defined as spending 30 per cent of household income on monthly payments – those on the Beaches are contending with some of the highest repayments in the country. Digital Finance Analytics found that locals were paying $3,124 a month, far higher than the state average of $2,167. Residents of Bayview and Duffys Forest ranked sixth and eighth most likely to be at risk of defaulting on their mortgage.
Pittwater also suffers from some of the worst housing affordability in the country, with prices in certain postcodes soaring by almost 30 per cent in 2021 alone. It is these stratospheric rises, coupled with repeated rate hikes, dense urban concentration and chronic under-building in sought-after areas, that have caused the housing crisis to bite so hard on the Beaches.
President of the Real Estate Institute of Australia, Hayden Groves, tells us that first-time buyers who paid over the odds in boom conditions, along with investors struggling to cover two mortgages, are suffering the most. “People on fixed-term loans at two per cent will find themselves with a threefold rise and in Sydney, where affordability is most constrained, up to 46 per cent of incomes are going on mortgages. There’s not a lot of wriggle room if rate rises continue.”
Financial pressure to pay for a home has become more widespread than ever before, says ACOSS chief Cassandra Goldie.
The Beaches’ booming popularity is one of the key issues, with Northern Beaches Council (NBC) predicting that 23,000 more people will call the area home by 2036. This brings the startling local housing shortage of 8,100 affordable homes sharply into focus. Council’s Local Housing Strategy aims to ‘meet the needs of the future Beaches community by diversifying and boosting housing stock.’ An extra 11,995 homes by 2026 are planned, with 10 per cent assigned to affordable townhouses, terraces and social housing for key workers.
Shared accommodation, dual occupancy and the rezoning of at least one ‘centre investigation area,’ in Mona Vale, Brookvale or Narrabeen – to compensate for 980 proposed Ingleside Precinct homes – are also on the list. Northern Beaches Council Interim Chief Executive Officer, Louise Kerr, tells Peninsula Living Pittwater: “We know people in the community are experiencing mortgage and rental stress alongside rising living costs. Our local strategy supports a mix of housing types and we have set ambitious targets for the provision of affordable housing in the next 20 years.”
The Federal Government’s $10 billion Housing Australia Future Fund for 30,000 social and affordable properties across the country within five years, is also a step in the right direction. It is underpinned by a push to speed up planning and zoning regulations to allow for more building, and shorter lead times. Significant rainfall hampered the completion of more than 28,000 dwellings last year, while tight supplies of labour and materials also delayed construction. Throw in scarce availability of well-serviced land close to jobs and transport, and strong anti-development views from locals in havens such as Avalon, Whale and Palm Beach, and the crisis becomes clear.
Ingleside, an area with a housing shortfall, is scheduled for 980 homes.
“Our local strategy supports a mix of housing types and we have set ambitious targets for the provision of affordable housing in the next 20 years.” Louise Kerr, NBC
Northern Beaches Council Interim Chief Executive Officer, Louise Kerr.
Times are tough for tenants too. Housing advocacy group, Everybody’s Home, found that Beaches’ rents are rising by 30 per cent – $251 a week -pushing average prices up to $1,082 as landlords pass on rising costs. The flow of workers back into cities post-Pandemic, has also seen Sydney rental growth far outpace that of regional NSW. Desperate tenants have been forced to fight it out for a dwindling supply of properties, as the vacancy rate sits at a rock bottom 1.3 per cent. Also sapping the supply of available rentals is a 17 per cent drop-off in investor appetite since 2021. The Property Investors Council warns that a further 19 per cent of investors plan to sell soon, due to ‘rising interest rates making it harder, or impossible, to afford repayments’.
Clearly, the crisis has a way to run, says Australian Council of Social Services chief executive, Cassandra Goldie. “The financial pressures associated with keeping a roof over your head are becoming far more widespread than we have ever seen in the past,” Ms Goldie says.
By Catherine Lewis