In short
A study has predicted that Greater Sydney's property market will be unaffordable for anyone on a median income until next decade.
The study, released earlier this month, analysed the costs of properties from 2004 to 2022 in Greater Sydney, using this data to forecast the market until 2031.
According to the results, the quarterly costs for any property across the city will be unaffordable for anyone on a single median income until at least 2031.
It's no secret that property prices in Sydney are eye-wateringly high.
According to some figures, the median cost of a house in the NSW capital is $1.4 million, making it the most expensive in the country.
But according to a new study, property prices across Greater Sydney will be unaffordable for anyone on a single median income until at least the next decade.
The study, published earlier this month in the journal Cities, forecasts property prices in Sydney from 2022 to the end of 2031, doing so by analysing the city's market from 2004 to 2021.
The authors then compared the expected repayments of these estimated values to NSW's median full- and part-time incomes.
According to the results, quarterly repayments — including houses, apartments and townhouses — in 2031 for those on a median full-time income will be, at minimum, double the ideal ratio of housing-payments-to-income
"While we expected the issue of housing affordability to be severe for part-time employment, we found that full-time employees are also significantly affected," said Professor Chyi Lin Lee, who co-authored the study.
"This highlights the widespread housing affordability crisis and the need for comprehensive policy solutions."
Growth of property values expected to be unaffordable for median incomes by 2031
According to Mustapha Bangura, a lecturer of property finance at University of Technology Sydney and lead author of the study, the initial intention was to explore what rising housing costs meant for part-time workers.
Part-time work is increasing across Australia. According to the ABS, between October and April, part-time employment increased by 104,299 people, almost double the growth for full-time employment over the same period.
"[Housing affordability] already is an issue, but when you relate it to the employment contract, we think it is worth examining to see what the future holds," Dr Bangura said.
Dr Bangura and Professor Lee began their research by first reviewing Greater Sydney's property market per quarter from 2004 to 2021.
The authors then compared these prices, and their likely quarterly repayments in the case of a mortgage, with NSW's 2021 median full- and part-time incomes to determine the "entry affordability index", or ratio of housing costs to income.
Anything at 30 per cent or below was considered affordable.
According to the analysis, only a handful of "Strata dwellings", or properties that include apartments, across Greater Western Sydney were around the 30 per cent mark for those earning the median full-time income of $1,500 per week.
But looking forward, the analysis predicted that the cost of any Greater Sydney property would be unaffordable for anyone on any median income until at least the end of 2031.
According to the results, the entry affordability index for a house in eastern Sydney in 2031 for someone earning $1,500 a week would be around 170 per cent.
A house near Parramatta for someone earning $600 a week, or the part-time median income, would be roughly 174 per cent.
"It's not going to get better the next at least five to six or up to 10 years," Dr Bangura said.
Dr Bangura added that anyone earning this income seeking to get a loan or make housing repayments would have to rely on financial assistance, including the Bank of Mum and Dad.
"This is an issue, because the dream of owning property in Australia is gradually fading, except if you have wealth in other assets or you get financial support from family members."
'Not a positive picture'
Michael Fotheringham, the managing director of the Australian Housing and Urban Research Institute, saw the results as further confirmation of Sydney's increasingly-unaffordable property market for both low- and medium-income earners.
"It is not a positive picture of improving housing affordability. It speaks to the level of challenge in turning our housing markets around," Dr Fotheringham said.
"We have such unaffordable housing in Australia, and it will take quite some time to really improve housing offerings."
Dr Bangura said there would be consequences if housing repayments exceeding 30 per cent became more commonplace.
"That means you may have to compromise on your family expenses, for example, educational costs, or recreational activities for kids."
One risk is that these high costs could also trigger "housing-induced poverty", where money that is meant for essentials is spent on housing.
"They may have to cut down on the budget, on food or essentials for them to be able to meet their housing expenses," Dr Bangura said.
Dr Bangura said the solution to this issue is complex, but would need to address both the supply and demand of housing in the city.
This could look like increasing housing grant limits to better collaboration between local, state and federal governments and increasing the supply of affordable housing.
"One way [to increase supply] is to accelerate inclusionary zoning."
Inclusionary zoning either mandates or incentivises private developers to include affordable or social housing in a residential development.
"That can help," Dr Bangura said. "And then also allowing [developers] to increase the number of apartments on a given block.
"Because with developers, it will be much quicker compared to bringing all the three levels of governments together."
Dr Fotheringham said the study's results indicated to him that, whatever the solutions may be, creating a more affordable market in Sydney wouldn't happen quickly.
"There's a lot of work to do, and there's no one thing that's going to fix it all," he said.
"This is just further reflection that this is a long-term challenge that we need to address."