Sydney residents brace for a future of high-rise slums

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The NSW Productivity Commission has touted higher towers, smaller homes, and fewer car spaces as the solution to the state’s housing crisis:

“Higher-density zones around train stations would double in size… The NSW productivity commissioner is also recommending design standards be relaxed to allow the construction of smaller apartments without access to parking, storage or direct sunlight”…

“The commission has also recommended minimum apartment size requirements be removed, to improve feasibility for developers and affordability for buyers”.

“Balcony size rules, storage requirements, and guidelines for “family-sized” units were also unnecessary, the commission found”.

That sounds like a ‘Bladerunner’ future for Sydney, doesn’t it?

The NSW Productivity Commission also wants to fill the new high-rise slums with more migrants:

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“There would be more migration opportunities for construction workers, to address a critical skills shortage”…

“It estimates an additional 30,000 workers will be needed to achieve the state’s housing targets”.

These high-rise slums “could bring Sydney rents down by as much as 10%”, according to Productivity Commissioner Peter Achterstraat.

Wow. A possible 10% decline in rents for a 100% decline in amenities. What a deal!

Let’s get real for a moment. 100% of New South Wales’ recent population growth has come from net overseas migration:

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NSW population change

In 2023, 184,600 net overseas migrants landed in New South Wales, requiring around 74,000 new homes.

Therefore, New South Wales’ housing shortage is being driven by excessive levels of immigration, which is projected to continue indefinitely.

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Sydney population projection

Instead, of consigning residents to living in expensive high-rise shoebox apartments without car parks, adequate storage, or natural light, the obvious solution is to cut net overseas migration dramatically to ease the demand for new housing.

Because under Urban Taskforce projections, half of all Sydneysiders will be shoehorned into tiny apartments by 2056, while only one quarter of residents (mostly the wealthy) will live in a detached house with a backyard:

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Sydney dwelling composition

How does such a scenario represent an advancement of living standards? Is this the future that Sydneysiders want?

If you don’t like this future, start lobbying for lower immigration.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.