Rents on the Lower North Shore are up 44.5 per cent since last year. North Shore Living investigates the impact of the housing crisis on renters and homeowners.
A housing and rental crisis unseen since the days of the Great Depression is battering Australia, with Sydney in the eye of the storm. One in four Greater Sydney households are suffering from mortgage or rental stress. As tenants suffer spiralling rent rises and plummeting vacancy rates, homeowners struggle to contend with repeated rate rises and ever-tighter borrowing, forcing many to choose between housing or food and healthcare.
The most recent Census found that housing stress – defined as spending more than 30 per cent of pre-tax household income on a mortgage – is affecting 19.8 per cent of Sydney owners, compared to 14.5 per cent elsewhere. Price spirals have left their mark, and while a lucky few have cashed in, many have found their income falling short of buying without stress, as Westpac and ANZ continue to tip potential further rate rises.
Times are tense for tenants too, with rents soaring by up to 49 per cent as landlords pass on rising costs. Amongst the hardest hit is the Lower North Shore, where the average rent is now an eye-watering 44.5 per cent higher than last year, up $338 to $1,097 a week. Second only to the gilded Eastern Suburbs, ballooning prices have forced many Lower North Shore renters, particularly in areas such as Willoughby and Lane Cove, to head to new postcodes.
Joel, 32, called Naremburn home for five years until the rent on his one-bedroom apartment on Willoughby Road rose in January from $875 to $1,150 a week. “I had no choice but to leave my touchstones –friends, my favourite coffee shop, and my walk to work. Many people I know have done the same as there seems no end in sight to these incessant rises,” says Joel, who now lives in shared accommodation in North Ryde.
Georgie Roussac wants to see better long-term renting options.
Willoughby councillor Georgie Roussac agrees, telling North Shore Living: “The rental affordability crisis is now shaping our suburbs. We want nurses, teachers and pensioners to live comfortably in our community. They should not be priced out.
“We need to create better long-term renting options and explore co-housing and shared living to support greater density and diversity, while maintaining green space.”
“The rental affordability crisis is now shaping our suburbs.” Willoughby councillor Georgie Roussac
While rents may be at their peak, Sydney’s vacancy rates are at a rock bottom 1.3 per cent. Streets away from the three per cent rate of a ‘balanced’ rental market, desperate tenants are now fighting it out for dwindling properties amid falling investor appetite. Leo Patterson Ross, chief executive officer of the Tenants’ Union of NSW, says, “We haven’t seen such low vacancy rates since the 1930s. This isn’t just an inner-city problem, the vacancy rate is incredibly low everywhere.”
‘Aggressive anti-development views’ from some Mosman and Hunters Hill locals are partly to blame for the housing shortages plaguing these expensive areas. Annual new home development in these areas was just 0.2 per cent, the Centre for Independent Studies (CIS) says, compared to an overall Sydney rate of 2.4 per cent. With only 33 new homes built in Mosman last year, the supply and demand deficit continues to ramp up.
“Whenever you restrict supply, you get high prices,” the CIS says.
“In order to ensure housing becomes more affordable, more building is now essential.”
The true drivers behind Australia’s housing crisis are $7 trillion worth of rapid real estate price growth in the last two decades, dense urban concentration and a shortage of residential land close to jobs. Throw in interest rates, COVID-19 pandemic ripples and chronic under-building in sought-after areas, and the crux of the crisis becomes clear.
“We cannot rely on quick cash government handouts like grants, which only put a band- aid on and push prices up further.” Kate Colvin, Everybody’s Home
Removing market heat hinges on boosting building, encouraging the return of investors and renewed focus on affordable homes and rentals. Federal Government initiatives such as the First Homeowner grant fall short of what is needed to help those seeking to enter the property market.
“We cannot rely on quick cash handouts like grants, which only put a band-aid on and push prices up further,” says Kate Colvin from housing advocacy group, Everybody’s Home.
“The sad reality is rents will keep climbing without bold government commitment.”
The Federal Government has answered with the ‘biggest single investment in housing in a decade.’ Federal Housing Minister Julie Collins recently a National Housing Accord proposal to build one million homes by the end of the decade, alongside a $10 billion Housing Future Fund. Commonwealth land is tipped to be released for development, and a push has begun to speed up planning and zoning regulations across the country –especially in areas close to transport links.
More than 40,000 new social and affordable homes are planned over the next five years, 10,000 of which are earmarked for essential workers, as all pay grades continue to be pressured.
As Ms Collins says, “Without a stable home, people struggle to live in good health, stay in education, and find a job. Home is the foundation from which we build our lives.”
By Catherine Lewis