‘A city with no future’: The real cost of Sydney’s housing crisis

When Zachary Moore decided to study urban planning, he knew he had to move from Newcastle to Sydney to seek opportunity. Then he felt the bite of the housing crisis.

With his degree coming to its end, and the reality dawning of finding work and accommodation outside student housing at Western Sydney University, Moore is beginning to look further afield.

“For the same price that you can buy a fairly crap apartment in Parramatta you can buy a pretty nice CBD apartment in Melbourne, and you’re being paid the same wage … in fact, depending on the industry you might get paid more in Melbourne,” the 23-year-old said.

“I’m in planning, and planning pays pretty well. But if I want to buy a home, I can’t afford Sydney. I can’t even afford most areas surrounding Sydney.”

Moore is one of many young people in Sydney who think the city is becoming a temporary home, a place to study or live for a few years, and then leave when the realities of the housing crisis become too much.

For each young person who moves to Sydney, two leave, a 2024 NSW Productivity Commission report found. Two-thirds of people leaving the city are of working age.

Members of The Sydney Morning Herald’s youth housing panel, who have put forward bold ideas to address the housing crisis, have also recounted their experiences of living in the city. They highlight crippling HECS debts, an inaccessible housing market and the proximity of more affordable cities as reasons that young people are fleeing Sydney.

The HECS barrier

James Ardouin, a 25-year-old Woollahra councillor, said one of the main barriers to home ownership for young people was their HECS debts and repayments, which limit borrowing power and the ability to secure a home loan.

“We want to be productive members of society; we want to pay back society for giving us a really good platform to have an education,” he said. “But at the same time, it’s just become a system where it’s a punitive measure that shuts us out from having the same economic opportunities as prior generations.”

Before the Hawke government introduced HECS in 1989, higher education was free for 15 years – which means Gen Z are unable to reap the benefits previous generations experienced, said Ardouin.

“We’re really one of the first generations who have felt the full impact of the HECS system. A lot of the politicians now are beneficiaries of a time when they didn’t have to pay for their HECS.”

The temporary city

Graduate urban ecologist Genevieve Heggarty, whose family lives in the Blue Mountains, has rented in Sydney for the past six years and spent “tens of thousands of dollars” on rent which she says has quashed any hope of settling in Sydney.

“We move to Sydney as a temporary situation when we’re studying, we start our careers, and then we’re leaving. It’s not a long-term plan to move to the city and to stay in Sydney.”

The 25-year-old said that for young people coming to Sydney for study, being forced into the competitive and expensive rental market sets them back and creates a disadvantage that isn’t experienced by those who can live at home while studying.

“I definitely think we need to talk about the disadvantages of that and this kind of intergenerational wealth of people that start off in Sydney are more likely to remain in Sydney because of that fact.”

However, even for those who can live at home, housing is not an easy ride. Matthew Thrum, a planner at private firm Ethos Urban, was able to purchase a small apartment in the inner west after saving for a deposit while living at home. He said his mortgage repayments would mean he was living under “housing stress”, a familiar experience for most young people.

“Show me someone who isn’t spending 30 per cent of their income on housing – that’s the threshold for housing stress. Everyone’s doing that except Boomers.”

As young people continue to struggle to find a foothold in the rental or housing market, the realities of Sydney’s generational distribution of wealth through property may be affecting social cohesion.

Says economist Sakshyam Pandey, 22: “When the generation before us were buying houses, I’m sure none of them were thinking, ‘Oh, in 40 years, my house is going to be 20 times the value, and the new generation, they’re not going to buy anything.’

“You can’t blame the people that own houses. You can blame the politicians and the political system, but you shouldn’t be blaming the people … it’s not really their fault – they just bought a house, they just did the rational thing, and they have huge [financial] gains from that, sure.”

However, according to Thrum, those who have seen their housing values skyrocket in recent decades have a responsibility to act in a way that is supportive of future generations.

“One rational actor’s behaviour can’t really be criticised in the broader system, but I do think you can criticise them on their current voting and attitude,” said Thrum, who believes older generations are starting to better understand the housing crisis.

“I genuinely feel that there is greater recognition that there is a housing crisis among [Baby Boomers] … I used to find almost outright housing crisis denial … I feel like that has faded a little bit.

“I don’t think we’re quite over the line of their recognising the increased difficulty, and I think part of that is their conflating an overall rise in living standards and new technology … like, ‘Oh, you’ve got an iPad now, how could you possibly be worse off than I was?’”

Asked how young people could increasingly see Sydney as a “temporary” city, NSW Housing Minister Rose Jackson said she saw the housing crisis as the biggest issue facing the state and believes it is the government’s “top priority”.

“We risk being a city with no future. We risk being a city where young people don’t put down their roots here, they don’t start their families here, they don’t start their businesses here, they don’t make their careers here because of housing.”

Evaporation of ‘community’

Heggarty said there was a “real lack of community” in Sydney as a result of renters living in unstable situations who feel they are unable to put down roots in the city.

“You’re less likely to invest in your community if you could be evicted at any point, if you could be priced out of that area. It just creates a social divide in many aspects, whether it’s generationally or just within a local space or your community,” she said.

But for those who already have relationships within their communities, it can mean they are forced to choose between living in areas they are familiar with and places with better work opportunities. For 22-year-old architecture masters student Amanda Eessa, her home in Fairfield is too far from most job opportunities in the CBD.

“We want to be closer to community. We want to be closer to family. We want to be closer to where we grew up, because we’ve had that strong connection,” Eessa said. “A lot of us still have that dream of coming back to western Sydney, designing for western Sydney, designing for our communities.”