North District – What’s Happening in the Housing MarketHousing Market Rental

Rents At September 2018 in North District, median rents for one and two bedroom dwellings

are highest in North Sydney, for three and four bedrooms they are highest in Mosman. Median rents across all dwelling sizes are lowest in Hornsby. Median rents range between $420 and $520 per week for one bedroom dwellings; between $500 and $695 per week for two bedroom homes; between $625 and $1050 per week for three bedroom properties; and between $768 and $2250 per week for four or more bedroom dwellings.

The table below gives the median rents for one, two, three and four bedroom dwellings for all the LGAs in the North District at September, 2018. Note that there are insufficient one bedroom properties in Hunters Hill to establish a median rent for the September quarter 2018.

Median Rents September 2018

  1 bedroom 2 bedroom 3 bedroom 4+ bedroom

Hornsby 420 500 625 768

Hunters Hill   580 990 1450

Ku-ring-gai 500 630 805 1125

Lane Cove 500 560 850 1200

Mosman 480 673 1050 2250

Northern Beaches 500 640 895 1200

North Sydney 520 695 975 1400

Ryde 470 500 670 850

Willoughby 520 650 900 1275

There have been moderate increases in median rents for all dwellings in all bedroom categories across North District between 2008 and 2017, with the strongest increase being for 2 bedroom dwellings in Ryde (81%). It is worth noting that increases in median rents in the five year period to 2018 have been lower than the increases experienced by Greater Sydney – however rental prices in this District were already high, while some other parts of Sydney were coming off a lower base.

www.facs.nsw.gov.au

The table below shows the percentage change in median rents by bedroom category (one, two, three and four or more bedroom dwellings) between 2013 and 2018. Due to the Northern Beaches Council amalgamation in 2016 data for Manly, Pittwater and Warringah may be impacted.

% Change 2013-2018 1 bedroom 2 bedrooms 3

bedrooms 4+ bedrooms

Hornsby 17% 9% 10% 9%

Hunter’s Hill 9% 14% 24% 18%

Ku-ring-gai 7% 7% 11% 13%

Lane Cove 18% 17% 20% 7%

Manly (Northern Beaches) 4% -2% -3% -14%

Mosman 9% 13% 17% 25%

North Sydney 13% 14% 15% 8%

Pittwater (Northern Beaches) 32% 21% 19% 33%

Ryde 31% 16% 8% 13%

Warringah (Northern Beaches) 25% 24% 20% 23%

Willoughby 6% 9% 7% 6%

The graph below shows the trend in the median rental level for all dwelling types in Northern District from 2008 – 2018. Rents have significantly increased in the past 10 years, however since 2017 this rate of increase has begun to plateau. Ku-ring-gai has experienced the smallest increase of 10% since 2008, with Hunter’s Hill reporting the highest at 53%, this is compared to a Greater Sydney average of 53%

www.facs.nsw.gov.au

Vacancy Rate A vacancy rate of 3% is regarded as representing a balance between supply and

demand. For most of the period since 2006, the vacancy rate has been below 2.5% - indicating a long term 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, using data from the Real Estate Institute of NSW.

Nevertheless, with dwelling completion rates falling (particularly in apartments) along with forecast continued strong population growth, rental markets are projected to tighten again.

The graph below shows the vacancy rate for the Inner, Middle and Outer rings of Sydney for the period from 2006 to 2018. Note that Lane Cove, Mosman and North Sydney are in the Inner Ring, Hunter’s Hill, Ku-ring-gai, Ryde and Willoughby are in the Middle Ring and Hornsby and Northern Beaches are in the Outer Ring.

Despite the easing of overall rental supply, there is very little affordable private rental for very low, low and moderate income earners in North District.

Affordable Rental The reduction in the proportion of rental housing that is affordable for very low to

moderate income earners since 2006 has been significant, with a dwindling proportion of stock now affordable for very low income earners. At September 2017, the proportion of private rental stock that is affordable for very low income earners in the North District ranges from 0.0% in Hunter’s Hill to 2.5% in Ryde. All North District LGAs are below the very low average of just 2.8% across Greater Sydney.

www.facs.nsw.gov.au

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800Rent time series - North District - All dwellings all bedrooms - 2008 to 2018

GREATER SYDNEY

Hornsby

Hunter's Hill

Ku-ring-gai

Lane Cove

Manly (Northern Beaches)

Mosman

North Sydney

Pittwater (Northern Beaches)

Ryde

Warringah (Northern Beaches)

Willoughby

The proportion affordable for low income earners ranges from just 3.5% in Ku-ring-gai to 16.7% in Ryde – all North District LGAs are below the Greater Sydney average of 23.1%.

Ryde is the only LGA in the district with a higher proportion of affordable rental stock for moderate income household (70.8%) than the Greater Sydney average of 69.9%, with Ku-ring-gai having the lowest proportion with just 37.9%.

The graph below shows the proportion of affordable rental for very low income households in each of the local government areas in the North District compared to Greater Sydney between 2001 and 2017. This graph also takes into account the 2016 Northern Beaches Council amalgamation.

www.facs.nsw.gov.au

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

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

The graph below shows the proportion of affordable rental for very low income households in each of the local government areas in the North Sydney District compared to Greater Sydney between 2001 and 2017. This graph also takes into account the 2016 Northern Beaches Council amalgamation.

The table below shows the proportion of affordable rental stock for very low, low and moderate income households in each of the North District LGAs at September 2017. In all three income categories there is very little affordable rental housing available.

www.facs.nsw.gov.au

Area Very Low Incomes Low Incomes Moderate Incomes

Hornsby 1.9% 9.5% 69.3%

Hunter’s Hill 0.0% 8.6% 64.9%

Ku-ring-gai 1.4% 3.5% 37.9%

Lane Cove 0.6% 3.9% 61.2%

Mosman 0.5% 4.6% 41.2%

North Sydney 0.6% 6.1% 47.9

Northern 1.0% 6.3% 45.6%

Ryde 2.5% 16.7% 70.8%

Willoughby 0.7% 4.3% 39.3%

Greater Sydney 3.9% 23.1% 69.9%

Rental Stress With the exception of Lane Cove (95%), all the North District LGAs have a higher

proportion of very low income households in rental stress than the Greater Sydney average (96%), with Hunter’s Hill reporting 100% of very low income households being in rental stress.

All of the North District LGAs have higher than Greater Sydney average proportions of low income households in rental stress ranging from 82% in Ryde to 96% in Hunter’s Hill, with the Greater Sydney average being 70%.

These are extremely high proportions of lower income renters in housing stress. This again suggests that lower income earners are choosing to live here despite the lack of affordability. This indicates the need for more affordable housing targeted to lower income earners in the North District.

The graph below shows the proportion of both very low and low income households in housing stress in each of the LGAs in the North District at the 2016 Census.

www.facs.nsw.gov.au

The table below shows the number and proportion of tenants in the District who are in the private rental market, are in receipt of Commonwealth Rent Assistance (CRA), and are in housing stress at 2016. All the North District LGAs have a higher proportion of CRA recipients in housing stress than the average for Greater Sydney (50.7%).

Area Total CRA recipients 2016

CRA recipients in Housing Stress 2016

% in Stress

Hornsby 3,780 1,987 52.6%

Hunter’s Hill 269 156 58.0%

Ku-ring-gai 1,560 962 61.7%

Lane Cove 792 449 56.7%

Mosman 512 640 66.4%

North Sydney 1,540 1,102 71.6%

Northern Beaches 5,887 3,540 60.1%

Ryde 4,590 2,531 55.1%

Willoughby 1,702 1,160 68.2%

Greater Sydney 228,180 115,735 50.7%

www.facs.nsw.gov.au

Hornsby

Hunter's Hill

Ku-ring-gai

Lane Cove

Mosman

North Sydney

Northern Beaches

Ryde

Willoughby

Greater Sydney

0102030405060708090100

Proportion of Very low and Low Income Households in Housing Stress - North District - 2016

% of Very Low Income Households in Rental Stress

% of Low Income Households in Rental Stress

Loss of Affordable Housing Stock

All North District LGAs have experienced a significant loss of affordable rental housing between 2006-2017 (as measured by new bonds lodged) - ranging between 78.5% fewer affordable rental bonds lodged in Willoughby over that period to 94% fewer in Lane Cove.

A total of 5,164 affordable private rental properties have been lost between 2006 and 2017, with 3,898 lost between 2006 and 2010 alone.

The vast majority of LGAs already had very low levels of affordable housing in 2006 – underlining that a lack of affordable housing is as much an historical issue, as it is a current one.

In 2017 in Hunter’s Hill, there were just 13 properties that theoretically were affordable to households earning 80% of the Greater Sydney median income, 19 in Lane Cove, 20 in Mosman and 27 in Ku-ring-gai.

Even those LGAs within North District that have historically provided more affordable private rental accommodation, have had significant losses – Ryde has lost 78.5% and Hornsby 87.9%.

The table below shows the number of new bonds lodged that were affordable to low income households at 2006, 2010, 2013 and 2017. Manly, Pittwater and Warringah LGAs have been combined into Northern Beaches for the purpose of this table.

No. of affordable rental properties for low income households

LGA 2006 2010 2013 2017

Hornsby 859 280 255 104

Hunters Hill 72 38 19 13

Ku-ring-gai 135 94 56 27

Lane Cove 319 84 62 19

Mosman 246 62 37 20

North Sydney 925 271 169 96

Northern Beaches 925 271 312 154

Ryde 1,764 594 475 240

Willoughby 181 92 86 39

www.facs.nsw.gov.au

This loss of affordable housing is having a direct impact on key workers (who are often lower paid) that work in the District. Between 2006 and 2016, Ryde in particular saw a 14.2% decline in the number of key workers who live in the LGA.1

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

North District in particular has a high number of health care, education and aged care workers who work in the District, due to the number of hospitals and schools. The presence of key workers is also high thanks to Macquarie University and the number of aged care facilities in the Northern Beaches and Ku-ring-gai.

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

Housing Market – Purchase

Sales Prices Changes in median sales price between 2013 and 2018 have been upward

across the District. The largest increase in median sales price for houses was in Mosman (67%) and for units was in North Sydney (48%).

This long term trend has more recently been reversed, with a decline in house prices in all LGAs, with some such as Ryde having an 18.7% decline in median non strata house prices over the last year.

Generally increases in median sales prices have been higher than changes in median rents over the same period. There is some evidence that around 10% of residents claim negative returns on investment properties (though these properties may not be in the District). Investment in negatively geared properties indicates the expectation of capital growth. More recent decreases in property prices may impact on these investment decisions, and if there is a decline in investor interest, this may provide space for owner occupiers in the market.

The table below gives the current median sales price for both strata and non-strata dwellings, as well as the change in both dollar and percentage terms by LGA between 2013 and 2018. Due to the Northern Beaches Council amalgamation in 2016, Northern Beaches and Manly, Pittwater and Warringah Councils have been reported separately.

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

www.facs.nsw.gov.au

Flats Houses

LGA Sep 2013 Sep 2018 Change % Sep 2013 Sep 2018 Change %

Hornsby $545,000 $670,000 $125,000 23% $838,000 $1,193,000 $355,000 42%

Hunters Hill $780,000 $877,000 $97,000 12% $1,800,000 $2,875,000 $1,075,000 60%

Ku-ring-gai $690,000 $905,000 $215,000 31% $1,311,000 $2,050,000 $739,000 56%

Lane Cove $580,000 $745,000 $165,000 28% $1,618,000 $2,650,000 $1,032,000 64%

Manly

(Data is from September 2013

- June 2017)

$808,000 $1,364,000 $556,000 69% $1,510,000 $2,678,000 $1,168,000 77%

Mosman $650,000 $900,000 $250,000 38% $2,200,000 $3,675,000 $1,475,000 67%

North Sydney $725,000 $1,070,000 $345,000 48% $1,495,00

0 $2,278,000 $783,000 52%

Northern Beaches

(Data is from June 2017-September

2018)

$900,000 $860,000 -$40,000 -4% $1,850,000 $1,650,000 - $200,000 -11%

Pittwater

(Data is from September 2013

- June 2017)

$665,000 $845,000 $180,000 27% $1,051,000 $1,800,000 $749,000 71%

Ryde $597,000 $700,000 $103,000 17% $988,000 $1,435,000 $447,000 45%

Warringah

(Data is from September 2013

- June 2017)

$569,000 $880,000 $311,000 55% $1,050,000 $1,700,000 $650,000 62%

www.facs.nsw.gov.au

Willoughby $710,000 $998,000 $288,000 41% $1,501,000 $2,240,000 $739,000 49%

The two graphs below show the long term trend in median sales price for houses (non-strata) and for strata properties.

Prices have been steadily increasing since September 2013 across all LGAs. While most LGAs have seen a drop in median non-strata sales from September 2017 prices remain very high, relative to five years ago.

The median sales prices for strata properties have also increased from 2013, particularly in Manly and North Sydney. This increase was strongest between 2015 and 2017. However since late 2017, all LGAs except Willoughby have seen a drop in media sales price for strata properties.

www.facs.nsw.gov.au

Purchase Affordability Purchase affordability for very low income earners in North District has been close to 0%

across all LGAs for the past 16 years. It is virtually impossible for very low income earners to purchase in any of the LGAs in the District.

Despite a recent upswing in affordability, home purchase is still not feasible for very low income households within this District.

At June 2017, while there has been a very small increase in affordability, purchase affordability for very low income earners ranges between 0% in Mosman and 1.3% in Hunter’s Hill.

The graph below shows the proportion of stock affordable for purchase by very low income households in each of the LGAs in North District, compared to the Greater Sydney average between 2001 and 2017.

The situation for low income purchasers is only marginally better. As of June 2017, the affordability rates varied from 0.6% in Mosman to 3.2% in the Northern Beaches.

The graph below shows the proportion of stock affordable for purchase by low income households in each of the LGAs in North District, compared to the Greater Sydney average between 2001 and 2017.

www.facs.nsw.gov.au

Even opportunities for moderate income households are quite limited in this District. Currently Hunter’s Hill provides the most opportunity to purchase property with an affordability rate of 9.3%, with Ku-ring-gai reporting the tightest market with an affordability rate of 1.2%. All LGAs were below the Greater Sydney average of 12.8%.

The graph below shows the proportion of stock affordable for purchase by moderate income households in each of the LGAs in North District, compared to the Greater Sydney average between 2001 and 2017.

www.facs.nsw.gov.au

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

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