First home buyers “locked out by decade of Sydney undersupply”!

First home buyers have effectively been locked out of Sydney’s housing market because of a “decade of undersupply”, according to the Daily Telegraph:

First homebuyers locked out of Sydney’s runaway housing market are paying the price for a decade of “consistent undersupply” of new homes being built…

“There’s been 10 years of undersupply, recognised by the NSW Government’s own Productivity Commission,” [Urban Taskforce CEO Tom Forrest said] told The Daily Telegraph, adding “supply is the primary driver of housing unaffordability”…

Experts in the field have identified a lack of housing supply as the key issue in driving up costs, including former Reserve Bank of Australia Governor Glenn Stevens, who pinpointed that housing supply needs to be “able to respond to demand in a more elastic way” if the goal was housing affordability.

“Certainly, if our objective is housing being ‘affordable’ … This means we need to have the supply side able to respond to demand in a more elastic way,” he said in a 2017 report.

Cut the crap. Sydney’s ‘decade of housing shortages’ was caused by an oversupply of migrants, not an undersupply of housing.

NSW Productivity Commission White Paper explicitly stated that Sydney’s housing shortage was caused by an unexpected boom in Sydney’s population when the federal government threw open the immigration floodgates in 2005:

Much evidence suggests that our State, and Sydney in particular, has not delivered enough housing over many years.

Of many possible contributing factors, two stand out. First, population growth has exceeded expectations. Forecasts made in 2005 predicted that Sydney’s population would reach 5.2 million by 2031. More recent projections are for a population of around 6.2 million by this time (NSW Department of Planning, Industry and Environment, 2019).

Second, housing supply policy has not achieved the desired results… Since 2006, NSW housing supply has not kept pace with demand or State targets. That has created an accumulated underlying shortage of dwellings.

The NSW Budget also revealed that the state’s structural housing shortage has all but evaporated thanks to the collapse in immigration:

Building approvals are now running well ahead of the change in population, which is depressed due to the lack of inward migration. This suggests a potential oversupply in the near-term relative to the underlying demand for housing (Chart 2.13).

The NSW Intergenerational Report, released earlier this month, noted that “net overseas migration is expected to return to positive levels in 2023, before returning to pre-COVID-19 levels towards the end of this decade”. Accordingly, “net migration is projected to contribute 2.0 million people to the NSW population” over the projection period to 2061, which “will need 1.7 million additional homes for a growing population, equivalent to one new home for every two existing homes”.

Thus, it is extreme levels of immigration that has caused Sydney’s purported housing shortage, which could be permanently solved with the stroke of a pen by the federal government. All it needs to do is reduce immigration back to historical pre-2005 levels. This would also negate the need to bulldoze Sydney’s suburbs into high density.

Sydney’s population growth is 100% driven my immigration.

Without immigration, Sydney’s population wouldn’t even grow (see above chart).

The media and policy makers need to stop gaslighting the populace. Mass immigration is the sole driver of Sydney’s housing shortages.