When it comes to millennials, everyone’s got an opinion. Worth ethic this, avocado that.
And now with the publication of the 370-page NSW Productivity Commission white paper, they might be on the hook for flooding the property market in the second half of this decade, too.
According to the NSW government think tank’s paper, supply will meet demand in the state’s property market by 2025, before a mass migration of millennials from their parent’s homes upsets the balance. As a result, NSW will face a dire housing shortage and be in need of hundreds of thousands of new houses and units, unless we do something about it sooner. And since we’re already short on space in many Sydney suburbs, we’ll have to build up instead of out and accept even higher-density living.
In NSW, the number of young adults still living at home with their parents rose almost 10% in eight years, from 23.6% in 2010 to 32.4% in 2018, with the growing cost of housing largely to blame. These numbers are likely to rise significantly again due to the financial burden the pandemic has placed on many young Australians. According to NSW Executive Director of the Property Council, Jane Fitzgerald, “Housing affordability is a dire challenge that is causing distress for people right across NSW and the White Paper rightly calls for local housing delivery processes to be scrutinised and for the State to step up to ensure a strong pipeline of housing.”
Millennials’ delayed entry into the property market may have eased the burden on the NSW Government to provide adequate housing opportunities, but the pause can’t last forever—just ask mum and dad. Eventually, millennials will move out en masse, and when they do, the exodus could wreak havoc on the market. Despite this, very few planning regimes consider meeting the demand for housing as their objective.
So, what’s the solution?
Essentially, less red tape and more building—stat. According to NSW Executive Director of the Property Council, Jane Fitzgerald, the NSW planning system needs to do a better job at addressing the housing affordability crisis in the state and “untie the knots in the planning system and speed up processes to deliver benefit to the economy and release the homes our state so desperately needs.” According to the report, “strict constraints on the location, nature, and density of housing are limiting choice and leaving people with less income to spend on other goods and services.”
One suggestion by the commission is that councils should be offered incentives to approve more housing and speed up development application approvals, while also setting population-growth targets for different council areas. The paper also reveals that in NSW, some types of property developments take longer than any other state in the country to be approved, while average DA approval times increased to 85 days in 2017-2018.
As NSW begins to embark upon its prosperous post-Covid period, we’re likely to witness increased focus (and funds) on infrastructure and property development. But will it be too little too late? Your move, millennial.