Housing affordability is a major battleground in the upcoming NSW election – but one potential solution is being ignored, according to a strata property development specialist.
Warren Livesey, founder of Buy Airspace, said an obvious way to make Sydney housing more affordable would be to significantly increase its housing stock. This would need to be done through ‘airspace development’, which involves building new housing on top of existing apartment blocks.
Sydney is in the grips of a housing supply crunch, with the NSW Government’s Intergenerational Report predicting the city needs an additional 1.7 million homes by 2060-61 to meet demand based on current population projections. Mr Livesey said this means over 40,000 new homes need to be built every year.
“Every suburb needs to pull their weight – as you can't increase Sydney’s housing supply with greenfield development alone. That’s because there is limited new land where homes can be built even if you ignore all the infrastructure and zoning constraints. Airspace development is helping address London’s housing crisis, and it has the potential to transform Sydney as well,” he said.
The UDIA NSW Greenfield Land Supply Pipeline Survey said the Greater Sydney Megaregion was facing a shortfall of over 25,000 greenfield housing lots at best relative to demand by the 2029-30 financial year.
“While you could go some way to hitting the target by replacing houses with apartment blocks in established suburbs, it would change the character of many areas forever – and could meet with significant local pushback,” he said.
“Both of those problems would be solved with airspace development, or building new properties in the unused roof space in strata complexes.
“Airspace development wouldn’t just increase Sydney’s housing supply and put downward pressure on prices – it would also make it easier for owners to fund repairs and maintenance of their buildings.
“Strata owners who unlock the unused space in their buildings can generate up to $2 million in additional funds. This can either be put towards repairs and maintenance or paid out as profit for owners to spend as they like.”
However, Mr Livesey cautioned that you need council approval and at least 75% of the strata owners to support a project for the development to go ahead.
“I think both major parties need to talk about airspace development during this election as a potential solution to the housing affordability crisis,” he said.
“Right now, a lot of owners don’t know airspace development is an option and some councils are also still coming to terms with the concept.
“Once the major parties put airspace development on the agenda, it will become front of mind for more owners and councils. That should stimulate more development activity and increase Sydney’s housing supply, which is the key to putting downward pressure on prices.”