Sydney Housing Affordability Is Broken, The Real Bottleneck Is Feasibility

Sydney is pricing out the people who keep the city running. Nurses, teachers, police, and tradies are being pushed further out, or out entirely.

This is not a minor cycle. It is a structural squeeze. The numbers in this episode make that clear.

What Happened

On The Property Nerds, the team spoke with Mark Speakman from the NSW Liberal Party about the housing supply crunch in Sydney and across New South Wales.

The conversation centred on one idea that keeps getting missed in mainstream debate.

Sydney does not only have a supply problem. It has a feasibility problem.

You can approve more zoning. You can announce more targets. But if projects do not stack up financially, they do not get built.

Key Findings

1. Sydney is now severely unaffordable

A key benchmark raised was the income-to-price ratio.

• Around 50 years ago, an average Sydney home was roughly 4 times average income
• Now it is closer to 13 times

The blunt claim was this. There is not a suburb in Sydney where a buyer on the local median income can afford the local median home.

2. The biggest supply bottleneck is financial feasibility

The episode landed hard on a practical blocker.

• High interest rates reduce borrowing capacity for developers and buyers
• Construction costs, especially labour, have risen sharply
• Taxes and charges can represent 25 to 40 percent of the cost of a new home package

That is why the phrase “home and tax package” came up. Because for many projects, government costs sit inside the final price in a way most buyers never see.

3. Planning reform helps, but it cannot carry the whole load

Planning reforms can improve feasibility because time is money.

• Delays increase holding costs
• Complexity increases uncertainty
• Uncertainty gets priced into projects

A faster, more predictable system can lift supply. But it still cannot solve the maths if costs stay too high.

4. Quick demand boosts can backfire

The discussion pushed back on policies like:

• 5 percent deposit schemes
• Broad first home buyer boosts that inflate bidding power

The argument was simple. When supply is tight, increasing demand usually increases prices first.

There was also a consumer risk angle. A low deposit can mean buyers are more exposed if rates rise or circumstances change.

5. Trades and training are a hidden constraint

Even if approvals improve and feasibility improves, you still need workers to build.

A point raised in the episode was that apprentice commencements were at five-year lows, and completion rates vary sharply depending on training pathways.

If labour capacity does not grow, costs stay high and delivery stays slow.

Action Steps

1. Track feasibility, not just zoning
   Look at construction costs, developer margins, and approval timeframes in your target market.
2. Pressure test your borrowing assumptions
   If your plan only works at one interest rate, it is not a plan. Build in buffers.
3. Be sceptical of “easy entry” schemes
   A smaller deposit can increase risk. Treat it as leverage, not a gift.
4. Follow infrastructure and precinct renewal plans
   Large renewal sites and station precinct changes can reshape supply, but timelines are often 5 to 15 years. Invest with that reality.
5. Build a portfolio that does not rely on Sydney alone
   If your goal is growth with lower entry costs, diversify across markets with stronger feasibility and higher supply responsiveness.

Final CTA

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