Locals Flee from New South Wales


A newspaper headline “Fleeing locals ease population pressure on New South Wales” highlights a trend over the last few years. Since 2002 the Australian state of New South Wales, the country’s most populous with over seven million residents, has been losing its residents to other states at some 20,000 per year.

During the year ended December 2009, 0.2 per cent of the New South Wales population moved to other Australian states. By contrast the State of Queensland, gained 0.3 per cent. Total population growth (consisting of net immigration, natural increase and net interstate movement) in the states of Victoria, Queensland and Western Australia was 2.13, 2.44 and 2.65 per cent respectively. By contrast New South Wales grew a desultory 1.64 per cent.

The main reason ascribed to the exodus from New South Wales is the cost of housing in Sydney. The 6th Annual Demographia Housing Affordability Survey shows that its capital city Sydney has the second highest housing costs of the cities in the six countries surveyed, behind only Vancouver, Canada. For many people, 9.1 years of median family income required to purchase a median family home Sydney is becoming too expensive to live in.

The Demographia Survey indicates that a price/income ratio of 3.0 can be considered affordable and 9.1 severely unaffordable. As a result many people, especially the young, will never be able to aspire to the Great Australian Dream of owning their own home. For those who can afford a home, the average wait time to save for the required deposit is 6.2 years. The newly appointed Federal Sustainable Population Minister recently is quoted as saying “people have said all I can see for my kids is they’re never going to be able to afford to live in this suburb because of what’s happening with housing prices”.

The high cost of housing has significant social impacts. The Demographia Survey estimates that in Sydney 57% of median gross family income would be required to make mortgage repayments for a current median priced house. This may be compared with the 20 per cent figure applicable in Atlanta or Dallas-Fort Worth. There are already some 11,000 homeless persons in New South Wales and some 4,000 sleeping rough.

Why is the cost of housing in Sydney so high? The Demographia Survey portrays a widespread relationship among the cities studied between high housing cost and overly restrictive planning regimes. New South Wales is among the most restrictive. In order to implement a high-density policy it has restricted the release of greenfield housing sites from an historic average of 10,000 lots per year to an average over the last five years of only 2,250. This is in the face of a annual state population increase of some 115,000. It is staggering to consider this constraint in a continent-sized country of which only some 0.3 per cent is urbanised.

The scarcity resulting from the miserable allocation of greenfield lots has been most notable in land price, whose share of housing costs has increased from 30 per cent to 70 per cent of the total cost. The result has been an increase of overall prices some three times what it was ten years ago.
Only seven per cent of people, wish to live in apartments. However, in order to implement its high-density policy the State Government intends to force this lifestyle on reluctant consumers. It plans 460,000 extra dwellings within the existing footprint of Sydney by 2031. In practice the production rate of these high density units has fallen well short of that planned.

These high-density planning policies result in a dwelling scarcity which enables developers to make large profits on apartments. Developers now comprise by far the largest group (29.5 percent) among Australia’s 200 richest people. They have the resources to make sizable donations to both major political parties. Donations help fund election campaigns and in the past have helped keep the politicians who promote these policies in power. Numerous cases have been documented that show a large donation being made to a governing party shortly before permission was granted for a particular development.

The shortage of land also impacts commerce and industry. Higher housing costs result in higher rentals or mortgage costs. Workers have to make ends meet and so businesses have to pay higher wages. Additionally employers must shell out for higher commercial rentals. The cost of industrial land in Sydney is roughly 70 per cent greater than in the other Australian large cities. Recently there have been a number of well publicised instances of industries closing their factories in Sydney and moving to Victoria, the state located to the south.

Communities in Sydney are now paying the price for misguided state planning policies. Concrete, bitumen and tiles dominate vast areas where streetscapes of flowers and foliage once reigned supreme. There is a rising consciousness of disasters resulting from the government's high-density planning policies. as Along with the topic of unaffordable housing, traffic gridlock, disintegrating public transport, frequent power blackouts and a city running out of water hit the headlines with increasing frequency. Dissatisfaction is escalating.

The latest Newspoll puts the primary vote for New South Wale’s ruling Labor Party at 25 per cent, the lowest ever recorded. It faces a devastating defeat in the forthcoming March 2011 election. There can be little doubt that ill-advised planning policies are a major factor underlying this pending electoral calamity. But will politicians ever learn?

(Dr) Tony Recsei has a background in chemistry and is an environmental consultant. Since retiring he has taken an interest in community affairs and is president of the Save Our Suburbs community group which opposes over-development forced onto communities by the New South Wales State Government.

Photo by Nelson Minar

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Single-family homes and responsible development can coexist

Australia has avoided three of the United States' biggest errors in urban plannin, which are:

1. A model of freeway-centrism advocated by Le Corbusier and Robert Moses, which resulted in numerous neighborhoods being razed

2. The wholesale removal of all rail-based transit options (most notably the Twin Cities and Los Angeles)

3. Housing policies that encouraged the abandonment of the cities for sprawling subdivisions, filled with houses purchased on precarious credit, requiring an automobile for all transportation

Unfortunately for #3, Australia appears to have erred on the side of anti-developmental dogma. Subdivisions of primarily single-family homes do NOT require anti-pedestrian models of sprawl (yes James Howard Kunstler, it is true).

I understand why Sydney would not want their immediate environs to resemble the suburbs in the Bubble Belt of the US (for example, see suburban Tampa, FL). But they can turn to other American models of development for guidance in crafting an environmentally-responsible grid of single-family residences. Take the mature neighborhoods of southern Minneapolis, for example:


Within an 16-by-16 block section, the major intersection of 2 two-lane roads is zoned for several modest-sized commercial properties. In this example, there are six restaurants, a movie theatre, a grocery store, a liquor store, and locales for hardware, carpet, hair care and travel. Voila! the best features of New Urbanism - spaces for living, working, eating and playing are no longer segregated - all while providing access to single-family homes for those that prefer this residential option.

Traffic is minimized by the grid pattern, which eschews the congested model of several isolated subdivisions emptying onto a single 6-lane road.
While the area includes a modicum of surface parking, the tree-lined streets and wide sidewalks encourage walking from one's nearby house.

Within this major American city, well-maintained houses can be purchased for $250,000. The neighborhood has maintained a diversity of incomes by including a few apartment buildings and duplexes amongst the streetscape.

While the yards are sizeable enough for backyard events, they are compact enough to assure that all area residents are a brief walk away from the commercial areas. Bus transit allows 20-minute commutes to either downtown Minneapolis or the southern suburb of Bloomington.

Sydney urban planners can develop responsibly, and provide the needed housing stock.They can extend the current rail system so it connects the commercial district with the rest of the city.

The biggest difference

The biggest difference between the US and Australia is that there are many diverse metro alternatives. If you want to live in some hoity-toity city like San Francisco which has its own fair share of "Walkable" neighborhoods, local eateries, bicycle lanes, and so on ( I know because I live there) you can do so and pay out the wazoo for the privilege. SF sounds like the twin brother of Sydney where well-intentioned policies meant to curb over development and preserve natural beauty has basically made the city nothing short of a playground for the rich. Its the equivalent of any fine luxury automobile. Perhaps most people find a fully appointed BMW very nice indeed. But most of us can't afford the $70,000 price tag.

Thus you have cities like Atlanta, Houston, Dallas, and any number of other "sprawly" cities where less restriction has perhaps made them perhaps unattractive to those who choose a city like SF over the likes of such cities. Its all about idealism and what one thinks is attractive or enjoyable. In reality ALL human development is ugly because all we're doing is dotting the earth with our houses, buildings, and roads.

I won't profess to say I am super familiar with Australia, but it sounds like that if you're a young professional there you basically have less choices when it comes to buying a house since from the sound of reports, almost all of the major AU cities are extremely expensive. That versus where here in the US if you live in say- SF, you can just say the heck with it and move to TX, NC, TN, GA, AL, or any number of other states and to one of their major cities and buy yourself a house for $100,000-$200,000

Help for confused

The March 11 election referred to is the NSW state election. Federal election is in August, but most issues dealt with are not local in nature.
State election is more or less a certain victory for the conservative party, who recently experienced a 26% swing to them in a local by-election in a Sydney seat. If that happens state wide it will be approx 88 seats to 5(Labor incumbent), with 5 seats held by independents.

I am confused

"the forthcoming March 2011 election"
Isn't there an election in 5 weeks?

Dave Barnes
WebEnhancement Services Worldwide