Weekly Rents Surge from $500 to $2000 as Affordable Housing Vanishes — Sydney Auction Clearance Rate at 64%

Week’s Key Focus

A fierce planning dispute has erupted in Paddington in Sydney’s east, where developer Toohey Miller is seeking to take advantage of the state government’s housing incentives by demolishing a three-storey residential block containing 27 low-cost studio apartments and several terraces, and replacing it with an eight-storey luxury apartment building of around 40 units. Although the proposal includes about 10 affordable dwellings to be offered at discounted rent for 15 years, the plan has been met with strong opposition from local residents and councillors, who argue the policy is being used to “add floor space and stack extra height” while causing a net loss of genuinely affordable housing.

Woollahra independent councillor Harriet Price criticised the project for “double-dipping” both the affordable-housing bonus and the state’s new mid-rise housing reforms, effectively allowing the developer to add “five extra storeys out of thin air.” She said the existing 27 truly inexpensive apartments would be replaced by a large number of high-end dwellings, while the affordable units offered are few in number and temporary in nature. Resident Philip Clark added that the surrounding homes are mostly one- to two-storey sandstone cottages, making an eight-storey tower “completely out of character,” and has launched a petition titled Stop the Paddington Tower.

Residents are also concerned that tenants will be forced out once the old building is demolished, with new rents expected to jump from the current $400–$550 per week to as high as $1500–$2000 per week. One long-term resident, Grey, who has lived there for nine years, said the building provides rare affordable housing for students and creative workers: “Losing it would be a huge blow to the community.” Critics argue that similar incentive schemes across Sydney are accelerating the removal of older, cheaper apartment stock, worsening housing inequality.

The developer and supporters counter that Oxford Street is suitable for higher-density buildings, noting that the project will provide a mix of apartment types, improve the streetscape, and is close to shops and major transport links. Planning Minister Paul Scully said that “cities are not museums,” and that increasing housing supply is essential to easing the state’s shortage. However, residents fear this project could set a precedent — triggering a wave of adjoining site redevelopments and fundamentally transforming the character of Paddington.

Auction Results Last Week

Sydney:1,405 properties were scheduled for auction, with 885 results reported. A total of 564 properties were sold, producing a clearance rate of 64%. The total auction value reached AUD 677,379,852, and the median house price was AUD 1,749,000.

Melbourne:1,308 properties were scheduled for auction, with 999 results reported. A total of 653 properties were sold, resulting in a clearance rate of 65%. The total auction value reached AUD 513,541,650, and the median house price was AUD 955,000.