15 June, 2011

Sydney needs 10 new suburbs annually to meet housing shortfall, says Raine & Horne

The equivalent of up to 10 new suburbs every year is required to meet Sydney’s growing housing shortfall, according to leading property group Raine & Horne.

The latest ANZ Australian Property Outlook indicates housing completions have declined by over 25,000 per annum over the last decade[i], while property search firm PriceFinder says that average Sydney suburb has about 2,000 homes.[ii]

In 1999/2000 there were 51,500 housing completions in Sydney and just 25,500 in 2009/10.

Raine & Horne CEO Angus Raine said it often took three to four years for significant housing developments to be approved.

“Put another way, this shortfall equates to a failure to build the equivalent of up to 10 new Sydney suburbs per annum,” Mr Raine said.

Kent Lardner, COO of PriceFinder, warns the only feasible solution to the shortfall is medium and high density housing, given the significant costs attached to providing new infrastructure such as motorways, shopping precincts, schools and hospitals.

“Government support and finance for developers is the key, along with a significant reduction in the red tape associated with housing development,” Mr Lardner said.

In the meantime, Mr Raine said that the combination of the housing shortage, interest rate stability, increased immigration and vacancy rates below 1%, meant that Sydney real estate would continue to present a compelling long term investment proposition.

“A July interest rate hike would be the fly in the ointment, however it seems a flatter Australian dollar and slowing employment data might encourage the Reserve Bank to keep a lid on interest rates for now,” he said.

Mr Raine is also urging cashed up investors to buy sooner rather than later, and to consider quality homes close to amenities such as shopping centres, schools, public transport and/or motorways.

“Lifestyle attributes are also a significant obsession for many Sydney-siders, particularly Generations X and Y, so consider a location close to restaurants, café strips or the beach.

“If you find a quality home that ticks plenty of boxes, then it's a fair bet you’ll have secured a property investment that can potentially generate consistent cash flow and long term capital growth.”

Raine & Horne is an iconic Australian property firm, with more than 360 offices worldwide. Also an established Superbrand along with the likes of Qantas, Vegemite, Woolworths and Myer, the company has four distinct property service brands including Raine & Horne Residential, Raine & Horne Commercial, Raine & Horne Financial Services and Raine & Horne Rural.

-ENDS-

For further media information contact:

Angus Raine, CEO Raine & Horne, 02 9258 5422 or 0409 920 697

Kent Lardner, COO PriceFinder, 0437 770 123

Anna Truman, National Marketing & Communications Co-ordinator, 02 9258 5448

[i] ANZ Australian Property Outlook, June 2011, page 5

[ii] Survey 21 Sydney suburbs, PriceFinder Research, June 2011