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A million extra homes won’t fix housing affordability!

One million homes is about what we built in the past five years (974,732 dwellings, to be precise). Relative to the size of the economy, one million will in fact be a step down.

The demand for housing has risen due to low interest rates and working from home. Looking forward, immigration and rising incomes will add further pressures. In a well-functioning housing market, extra supply would cover that demand. But our housing supply has been unresponsive. The result has been a record low vacancy rate, soaring advertised rents and some of the highest house prices in the world.

Put simply, we are just not building enough apartments and we are building them in the wrong place. In Sydney, new construction is concentrated in outer suburbs – but that isn’t where people prefer to live. Instead, we need to build a lot more apartments in the inner and eastern suburbs, where the shortage of housing is most severe.