Housing affordability and housing submarkets : the case of Greater Sydney

To date, the existing body of literature on housing affordability and house price behaviour focused largely on international, national, state and city-based levels. Specifically, metropolitan city-based studies are done at aggregate levels despite the enormous empirical evidence pointing out the existing socio-economic and demographic discrepancies in these cities. In Greater Sydney, for example, studies such as Baum (2004), Costello (2009), Forster (2006), and Randolph and Tice (2014), have reported these socio-economic divergences within the city. These socio-economic discrepancies are also evident in other capital cities of Australia (Hulse et al. 2014). Specifically, they found that there is stronger concentration of social and spatial disadvantages in Sydney, Melbourne and Brisbane. Recognising these differences, the study adopted a sub-city empirical analysis of housing affordability and house price behaviour within Greater Sydney. The aim of this research is to enhance our understanding of housing affordability and house price dynamics in Greater Sydney from a disaggregated perspective. These methods and findings could also be possibly adopted in other capital cities of Australia. This research has filled an important gap in the housing literature in general and regional housing analysis in particular. The study has revealed the varying rates at which entry-level affordability is declining across the regions of Greater Sydney. The study found that the increasing number of property investment in the relative low-income regions of the city (western, inner-west and southern regions) could be a causative agent of the significant decline in entry-level affordability of these regions. Further, some households use low-income regions to get their feet in the property market and then move to the higher-end of the market as their equity improves. This trade-up housing strategy, combined with the growing property investment activities in the relative low-income regions of Greater Sydney, is contributing to the deterioration of entry-level affordability in these regions of the city. Policy makers could consider the findings of this study in formulating a more targeted and regionally-balanced housing policy