The NSW Government has announced that it will build 400 homes over three years for essential workers to rent at a cost of $450 million, or $1,120,000 each:
The build-to-rent scheme, which aims to “increase the supply of well built, well located, secure and accessible rental accommodation for the essential workers who keep Sydney running but are being priced out of the market”, will benefit essential workers such as nurses, paramedics, teachers, allied health care workers, police officers, and firefighters, according to a press release issued by the government on Sunday.
The $450 million of funding will allow Landcom, a NSW-based land and property development company, to buy up to four new sites and create at least 400 new apartments over the following three years.
A separate subsidy program will provide the dwellings to essential workers at a lower cost than market rent.
Construction on the first site is planned to begin in early 2026, subject to planning clearances, with essential staff able to move in by late 2027.
There are a few things to note here.
First, the $1,120,000 cost of construction for each apartment is excessive and, quite frankly, a rip-off for NSW taxpayers.
Second, 400 dwellings is a drop in the ocean compared to the 494,000 projected increase in NSW’s population over the four years to the end of 2027:
Source: 2024 Federal Budget
Virtually all of NSW’s population growth comes from net overseas migration, as illustrated below:
This extreme population growth has driven Sydney rents to the moon:
The single best thing that policymakers can do to ease the cost of renting for Australians is to slash net overseas migration to a level that is well below the nation’s capacity to build housing and infrastructure.
Everything else is akin to fiddling while renters burn.
