South District – What’s happening in the Housing MarketHousing Market – Rental

Rents Median rents have increased in all bedroom categories since 2016, at a similar rate to

Greater Sydney. Sutherland is the most expensive LGA to rent in, followed by Georges River and then

Canterbury-Bankstown. This trend is consistent across all bedroom categories. The table below gives the median rents for each bedroom category at December 2014

and September 2018. Note that due to Council amalgamations between 2014 and 2018, the LGAs have changed and this may impact interpreting trends.

Area December 2014 September 2018

1 bedroom

2 bedroom

3 bedroom

4+ bedroom

1 bedroom

2 bedroom

3 bedroom

4+ bedroom

Bankstown 185 270 350 400 NA NA NA NA

Canterbury 320 380 550 670 NA NA NA NA

Canterbury-Bankstown NA NA NA NA 370 430 550 680

Georges River NA NA NA NA 420 500 610 760

Hurstville 375 440 550 680 NA NA NA NA

Kogarah 330 450 560 655 NA NA NA NA

Sutherland 350 450 620 750 410 500 660 850

The table below shows the percentage change in median rents for studio, one, two, three and four or more bedroom dwellings between 2013 and 2017 and then between 2017 and 2018. Note that there are insufficient studio dwellings to determine the change in median rents for this bedroom category. Two sets of data are presented in order to take into account the amalgamation of Councils that occurred in this time.

% Change between 2013 and 2017 % Change between 2017 and 2018

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Area 1 bed 2 bed 3 bed 4 bed Area 1 bed 2 bed 3 bed 4 bed

Bankstown 15% 10% 8.3% 13.3%

Canterbury 31% 13.5% 10.9% 17.5%

Canterbury –

Bankstown -8% -2.4% 0% 0%

Hurstville 12.5% 16% 9% 17.1% Georges River -3.7% -2% -0.8% -4.4%

Kogarah 20% 13.6% 12.7% 3.9% Sutherland 0% 2% 0% 6.3%

Sutherland 12.5% 11.4% 8.3% 11%

The graphs below shows the long term trend in median rents for all dwelling types in the South District from 2011-2017 and then from 2017-2018. The graph shows that median rents have increased significantly since 2011.

Between 2011 and 2017 there has been a strong, steady increase in median rental prices. Over that period, rents (for all dwellings) increased by between 36.4% in Canterbury and 18.2% in Kogarah, with the average across Sydney SD being 25.6%.

The increase in median rental price slowed dramatically in South District between 2017 and 2018. Georges River and Canterbury-Bankstown have had a drop in median rental price to the December Quarter 2018, while Georges River has maintained its median rental price of $550 since September 2018. Whilst this moderation in median rent assists affordability, it remains to be seen whether it is temporary or longer term.

www.facs.nsw.gov.au

Mar-11Jun-11

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Rent time series - 2008 to 2017 - South District

Bankstown

Canterbury

Hurstville

Kogarah

Sutherland Shire

Sydney SD

Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18450

470

490

510

530

550

570Rent time series - 2008 to 2017 - South District

Canterbury-Bankstown

Georges River

Sutherland

Greater Sydney

Vacancy Rate For most of the period since 2006, the vacancy rate has been below 2.5% - indicating a

long term severe shortage of private rental accommodation. However since April 2017, the vacancy rate has been increasing sharply, and rose above the supply demand balance on 3% in December 2018. The graph below shows the vacancy rate for the Inner, Middle and Outer rings of Sydney between 2011 and 2018, using Real Estate Institute of Australia data. Note that Sutherland is in the Outer Ring, Canterbury-Bankstown and Georges River are part of the Middle Ring.

www.facs.nsw.gov.au

0

1

2

3

4

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6Vacancy Rate - Inner, Middle and Outer Ring Sydney - 2006 to 2018

Sydney - Inner Sydney - Middle Sydney - Outer Supply Demand Balance

Affordable Rental There has been a significant decline in the proportion of private rental stock that is

affordable to very low, low and moderate income households. At September 2017 the proportion of private rental stock that is affordable for very low

income earners in the South District ranges from a mere 1.1% in Sutherland to 4.7% in Canterbury- Bankstown (which was the only LGA in South District above the Greater Sydney average of 3.9%).

The graph below shows the proportion of stock affordable for rental by very low income households for the period from 2001 to 2016 in the South District and compared to the Greater Sydney Average. Due to Council amalgamations there is only one data point available for current LGAs, and as such only information up until 2016 has been included.

The proportion affordable for low income earners at September 2017 ranges from 14.9% in Sutherland to 32.7% in Canterbury-Bankstown – with all the South District LGAs being below the Sydney average of 23.1% with the exception of Canterbury- Bankstown.

Given the high proportion of low income households in the South District, the low proportions of private rental accommodation that are affordable for very low and low income households is of concern. It demonstrates the need for provision of affordable private rental housing specifically targeted for lower income groups.

The graph below shows the proportion of stock affordable for rental by low income households for the period from 2001 to 2016 in the South District and compared to the Greater Sydney average. Due to Council amalgamations there is only one data point available for current LGAs, and as such only information up until 2016 has been included.

www.facs.nsw.gov.au

Rental Stress There are very high proportions of very low and low income renters in housing stress in

South District. These households will struggle to pay for other essential households items, such as medical or educational expenses, food, and transport and energy costs.

The graph below shows the proportion of both very low and low income households in rental stress in 2016

The proportion of households in the private rental market in housing stress in South District ranges between 98% of very low income earners in Sutherland and 96% in Canterbury- Bankstown, compared to 96% for Greater Sydney. For low income households the range is between 85% in Sutherland and 63% in Canterbury-Bankstown, compared to 70% in Greater Sydney.

The table below shows the number and proportion of tenants in the South District who are in the private rental market, are in receipt of Commonwealth Rent Assistance (CRA), and even with this additional income support, are in housing stress. All LGAs have a higher proportion of CRA recipients in housing stress than the average for Sydney. Note

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Canterbury-Bankstown Georges River Sutherland Greater Sydney0

102030405060708090

100

Proportion of very low and low income households in rental stress - 2016 - South District

% of Very Low Income Households in Rental Stress % of Low Income Households in Rental Stress

that while Canterbury Bankstown has a lower proportion in stress than Georges River or Sutherland, it has significantly higher numbers of CRA recipients in housing stress.

Area Total CRA recipients 2016

CRA recipients in Housing Stress 2016

% in Stress

Canterbury-Bankstown 22,427 11,686 52.1%

Georges River 5,964 3,264 54.7%

Sutherland 5,443 2,911 53.5%

Greater Sydney 228,180 115,735 50.7

Loss of Affordable Housing Stock All South District LGAs have experienced a significant loss of affordable housing

between 2006 and 2017. Sutherland has seen a 91.7% decline, with Georges River down 89.6% and Canterbury Bankstown 72.3%.

The table below show the number of new bonds lodged that were affordable to low income households between 2006 and 2016. Please note the change in LGAs in this district as a result of council amalgamation.

No. of affordable rental properties for low income households

LGA 2006 2010 2013 2017

Canterbury-Bankstown 5,574 1,982 1,904 963

Georges River 1,786 428 380 185

Sutherland 2,495 725 533 207

District Total 9,427 3,087 2,623 1,355

This loss of affordable housing is having a direct impact on key workers (who are often low paid) that work in the District.1

Key and low income earners include teachers, registered nurses, hospitality services, accommodation and food services, early childhood, police and aged care workers.

1 Gurran, N., Gilbert, C. Zhang, Y., Phibbs, P. 2018 “Key worker housing affordability in Sydney”, Report prepared for Teachers Mutual Bank, Firefighters Mutual Bank, Police Bank and My Credit Union, The University of Sydney, Sydney

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These are important occupations and provide necessary services and assistance to the wider District community. In performing their roles in hospitality, education, public health and safety, key workers significantly influence the social and economic wellbeing of their local areas.

South District in particular has a high number of health care and aged care workers who work in the District, due to the number aged care facilities and the Sutherland and St George Hospital precincts.

Without appropriate affordable housing, these workers will be forced to move from the area, increasing the commute time for these workers or it may result in a shortage of available workforce.

Housing Market – Purchase

Sales Price Between 2010 and 2017 changes in median price have been upward with the strongest

increases being for houses in Kogarah (99.4%) and Bankstown (89.0%) and for flats in Canterbury (87.7%) and Hurstville (79.7%). Purchase prices have increased at a rate much higher than that of rental prices over the same period.

Between June 2017 and June 2018 prices for houses and flats fell across all LGAs in South District. While the slowdown in the residential market in Sydney and most of Australia has been widely reported, it is not clear how long this trend will last.

The table below shows the change in both dollar and percentage terms in median rents for both houses and flats in each of the LGAs between 2010-2016 and then 2017-2018.

Houses Flats

Area Mar 2010 Mar 2017 Change % Mar 2010 Mar 2017 Change %

Canterbury $605,000 $1,106,000 $501,000 82.8% $285,000 $535,000 $250,000 87.7%

Bankstown $500,000 $945,000 $445,000 89.0% $350,000 $600,000 $250,000 71.4%

Hurstville $699,000 $1,313,000 $614,000 87.8% $395,000 $710,000 $315,000 79.7%

Kogarah $813,000 $1,621,000 $808,000 99.4% $440,000 $718,000 $278,000 63.2%

Sutherland $715,000 1,270,000 $555,000 77.6% $451,000 $748,000 $297,000 65.8%

Houses Flats

Area Jun 2017 Jun 2018 Change % Jun 2017 Jun 2018 Change %

www.facs.nsw.gov.au

Canterbury-Bankstown $1,350,000 $1,200,000 -$150,000 -11.1% $820,000 $770,000 -$50,000 -6.1%

Georges-River

$1,051,000 $985,000 -$66,000 -6.3% $590,000 $562,000 -$28,000 -4.7%

Sutherland $1,410,000 $1,250,000 -$160,000 -11.3% $724,000 $690,000 -$34,000 -4.7%

The two graphs below show the long term median sales price trend for houses and for strata properties between 2008 and 2018 for each of the LGAs in the District.

Clearly there has been a significant increase in the median sales price of both houses and strata properties over that time frame, particularly from around 2013 to 2017. For example in Sutherland the June 2017 median house and flat price is 215% that of the June 2008 price.

www.facs.nsw.gov.au

Purchase Affordability Purchase affordability for very low and low income earners in South District has been at

close to 0% for most of the last 13 years, with the exception of a small jump in June 2013, as the graph below indicates. At June 2016, purchase affordability for very low income households is 0% in every LGA, except for Kogarah, where it is 0.2%. Since the Council amalgamation in 2017, purchase affordability has increased by a very small amount and now sits at between 0.2% in Georges River and 1.2% in Canterbury-Bankstown.

Due to Council amalgamations there is only one data point available for current LGAs, and as such only information up until 2016 has been included in the graphs below.

The graph below shows the proportion of stock affordable for purchase by low income households between 2001 and 2016 in South District. At June 2016 all the LGAs in South District had much lower

www.facs.nsw.gov.au

While there has been a slight recent improvement in purchase affordability due to a range of factors including further cuts in record low interest rates and easing of housing market price increases, at the same time there has been a significant decline in new residential construction.

It’s worth pointing out that housing costs have been rising much faster than wages in Australia. House prices increased significantly from the mid 1990’s, with median home prices increasing from four times median incomes in the early 1990’s to more than eight times that in Sydney in 20182. So while there has been a recent marginal improvement in rental and purchase affordability, the long term trend demonstrates a widening gap between housing costs and income.

Additional DataMore detailed housing data and tables used in this Snapshot are available from the Local Government Housing Kit Database on the FACS website at:

https://www.facs.nsw.gov.au/resources/nsw-local-government-housing-kit/chapters/local-government-housing-kit-database

More detailed information on Rent and Sales data is available from the Rent and Sales report on the FACS website at:

https://www.facs.nsw.gov.au/resources/statistics/rent-and-sales/dashboard

2 “Here’s a look at the widening gap between wages and house prices”. Chris Pash, Business Insider Australia March 6 2018.

www.facs.nsw.gov.au

More information on vacancy rates is available from the Real Estate Institute of NSW website (see their media releases on vacancy rates):

https://www.reinsw.com.au/

www.facs.nsw.gov.au