Historically, whenever the Sydney property market goes a bit crazy the rest of the country gets tarred with the same brush. There’s no doubt Sydney property is expensive, but it’s unlikely this will change any time soon unless we have a communist resurgence that dominates the west and ends capitalism as we know it. Here are a few reasons why we are delirious about changing housing affordability in Australia and mostly Sydney.
Those who tend to squeal the loudest about housing affordability are the young. The excessively educated young. The challenge with being excessively educated is that it comes with an expectation of being able to step into the highest echelon of income earners in a reasonably short period of time because that’s what past generations did.
In fact, the non-university educated ‘Gen Z’ will likely be a minority, meaning university education makes you ‘average’ at best or even lower considering there is more demand for mechanics, carpenters and electricians than there is for gender studies and French literature graduates. Average cannot get you a home in the inner suburbs of one of the globe’s most significant engine rooms. In fact, average is unlikely to even permit you to get to the middle or outer rings of Sydney and, soon, Melbourne.
If you want Australia to continue being pretty awesome, we are going to continue attracting a lot of migrants. Australian cities are more ethnically diverse than comparable cities like London and Paris, and far, far more diverse than the east.
Since many of the migrants to Australia already have their trades or university degrees, usually in something useful, these people rise to the top quite swiftly. Accompanied by our home-grown talent, there is going to be plenty of competition for the top jobs which will in turn create more top jobs and more demand for homes close to the top employers.
Other global cities
There are hundreds of articles online that highlight Sydney being one of the most unaffordable cities on the planet. What most of these unqualified commentators forget to acknowledge is that, against comparable global cities, Sydney has larger homes. One online resource (globalpropertyguide.com) aims to compare apples with apples. Here you can see the price per square metre of the world’s most expensive cities, where Sydney comes in seventeenth place. Singapore has almost double the price per square metre rate of Sydney and London is almost four times that of Sydney.
In summary, if Australians hope to benefit from economic prosperity we are going to need the world’s sharpest minds in our cities. This will be supplied through a combination of skilled worker migration and home-grown talent, but as they become more and more populous there will be more and more demand for the property they want.
Sadly, this means a twenty-four-year-old graduate is going to have to wait a few years for that trendy apartment in Darling Point or South Yarra, just as did the average Australians of yesteryear.