Wednesday 5 June 2024

Sydney's Property Supply Problem

Why is there such a shortage of property in Sydney? 
With Australia’s population ever-expanding, housing supply shortage is a growing issue for our population. Australia-wide, the total number of for-sale property listings is approximately 30% lower than a decade ago. Here are the chief factors that have caused the supply crisis: 

Limited Land Supply – This is most prevalent in the inner city suburbs of major metropolitan areas 

Increasing Hold Periods – Home owners and investors appear to be holding their properties for longer, particularly in blue chip suburbs 

Increasingly Sluggish Activity of Residential Development – far fewer Development Applications are being lodged due to the following two point 

Inefficiencies in the Planning System – the process that developers need to go through with councils are increasingly frustrating 

Rising Cost of Construction – Building costs including labour and materials have been seriously exacerbated by the Covid-19 pandemic 

Sydney’s Limited Housing Supply
Nowhere is supply more of an issue than in major capital cities. Sydney’s population has grown at such a rate that there are literally not enough homes to shelter everyone. All the factors listed above have created a perfect storm in terms of limited supply, with Inner City suburbs being particularly under-stocked vis-à-vis demand. 

Historic housing construction approvals in Greater Sydney and regional NSW
Source: Australian Bureau of Statistics 2022, Department of Planning and Environment analysis

How Supply has Radically Affected the Rental Market
This supply shortage also has a flow on effect in the rental market, with low stock levels and historically low vacancy rates creating radically increased demand resulting in record levels of rent increases. This is great news for investors, who are able to get increased return on investment and have far less chance of vacancy than in times gone by. 

Considering Property Investment? With further property supply and rental property shortfalls anticipated for 2025 and 2026, investing in available property now could be the way to go. Offering solid return on investment and capital growth over time, purchasing an investment property, particularly if exceptionally designed in a desirable, well connected location, makes good financial sense. Cramer Property have a selection of outstanding properties all very close to completion, ready for rental within mere months. Contact Emma Chappell today to learn more:

Emma Chappell
Head of Projects (Sales & Marketing)
Mob: +61(0) 404 769 509 

Disclaimer: This article contains general information gleaned from various sources. All information is of a general nature only. This information is not a substitute for specific legal, financial or accounting advice.