Calls for Government Quotas as Sydney Faces Shortage of Three-Bedroom Apartments — Sydney’s Auction Clearance Rate Hits 69%

Week’s Key Focus

According to a report by The Sydney Morning Herald, a severe shortage of family-friendly apartments in Sydney is driving calls for action from the Minns government, specifically to implement quotas for three-bedroom housing in suburbs designated for medium to high-density developments. Data from Domain reveals that less than ten percent of the residences recently sold in Sydney’s Inner West and the Canterbury-Bankstown areas—both targeted under the Transport Oriented Development (TOD) program—had more than two bedrooms.

Philip Oldfield, the head of the School of Built Environment at the University of New South Wales, noted that Sydney’s housing plans largely overlook the needs of families, who make up 25% of apartment residents. He warned that this discrepancy needs to be addressed; otherwise, many communities with children will face challenges, being forced to live far from transport hubs, which in turn increases commuting times and traffic congestion.

Although new construction projects are required to include at least 2% affordable housing, urban planning experts believe that there should also be quotas for three-bedroom units to address the long-standing market shortfall. Planning Minister Paul Scully pointed out that the state’s Apartment Design Guide already encourages developers to offer a variety of apartment sizes in new buildings to meet the diverse needs of families.

Tom Forrest, CEO of the Urban Taskforce, stated that if there is a market demand for family-friendly apartments, developers will provide such housing options. He refuted the notion that developers prefer smaller units and blamed the inefficiency of the planning system as the root cause of the current housing crisis. Meanwhile, urban planning expert Ryan van den Nouwelant emphasized that the government needs to establish regulations to ensure that new communities can meet long-term development needs, supporting the establishment of quotas for family-friendly units.

Furthermore, researcher Sophie-May Kerr noted in her policy paper that the common “child-free” assumptions in design and the perception of apartments as temporary accommodations have led to many apartments failing to meet the needs of families with children. She suggested that the government play a more active role in providing suitable housing, support the retrofitting of existing dwellings, and ensure that communities offer family-friendly amenities and infrastructure, to help more families live comfortably in apartments.

Auction Results Last Week

Sydney: 738 homes were auctioned, with results reported for 499 homes. Of these, 343 homes were sold, resulting in a clearance rate of 69%. The total auction value was AUD 415,785,188, with a median house price of AUD 1,647,500.
Melbourne: 1,011 homes participated in the auction, with results reported for 737 homes. A total of 450 homes were sold, achieving a clearance rate of 61%. The total auction value amounted to AUD 373,692,688, with a median house price of AUD 960,000.