The third report on housing from the NSW Productivity Commission,titled “What we gain by building more homes in the right places”,concluded greater density in areas closer to Sydney’s CBD had both financial and equity imperatives,saying the biggest gains would flow to low- and middle-income earners.
The report supports housing reforms outlined by Premier Chris Minns last December,as he faces concerted pushback from some Sydney councils over his density plans,withone claiming turning dual occupancy on properties would turn “western Sydney into Kolkata” and end backyard cricket.
Productivity Commission analysis found increasing the average apartment size from seven storeys to 10 from 2017 to 2022 would have contributed an additional 45,000 units,representing a 2 per cent increase in the city’s private dwelling stock,lowering apartment prices and rents by 5.5 per cent.
“In dollar terms,this is a saving of about $35 a week in rent on the median apartment – or $1800 a year. For a median income earner,this is equivalent to a 2.75 per cent increase in their real purchasing power,similar to a typical year’s wage rise,” the report stated.
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“Housing costs could be reduced further still with higher densities and even more supply ... In principle,this could be as much as 40 per cent for Sydney apartments.”
In addition to the economic benefits,the Productivity Commission argued greater density would increase the ability for a higher proportion of children to attend quality schools. On average,families were paying a 2.7 to 3.3 per cent premium to live within the catchment of a school with strong credentials,or about $50,000 extra on a $1.5 million home.