A major windfall of $7 billion is expected to come to Sydney’s property market after it was forecast to reach $6 billion in 2020, the latest of many expected windfalls.
Photo: Rob Homer While the amount was expected to be smaller than previous forecasts, the forecast is still big enough to be a “catastrophe for us”, said Mark Williams, chief executive of the Residential Builders Association of Australia (RBA).
“We’re in the midst of a housing market meltdown, we’re seeing a massive rise in rents, we have a large number of people moving out of the city and there’s an explosion of people living in remote areas,” Mr Williams said.
“It’s going to be incredibly challenging for the housing sector to keep up with the growth in demand and the demand for rental accommodation.”
The forecast also included a massive increase in the number of rental apartments, up 20 per cent to 3.5 million, from 2.1 million in the previous forecast.
“We are going to see a huge jump in demand, particularly in the rental market,” Mr Willis said.
A massive increase In a statement to The Australian Financial Press, RBA chief economist Andrew Wilson said the rise in demand for apartments was due to “rising incomes and housing affordability, and also the impact of climate change”.
“We also anticipate a number of other factors, including a higher level of construction activity, including construction of new apartment buildings,” Mr Wilson said.
The statement said the increase in demand was driven by rising incomes and the affordability of housing.
“Rental demand is forecast to grow from $8.9 billion in 2021-22 to $10.9 [billion] in 2021, with rental yields also expected to increase significantly,” Mr Watson said.
Renters to blame?
Sydney rents are already up 25 per cent since 2015, with a median rent of $1,842.