Demand for land in Sydney is now outstripping supply by more than 50 per cent.
According to Urban Development Institute of Australia, Sydney has again nabbed the top spot for the most expensive housing blocks out of Australia’s five biggest capitals.
NSW chief executive Stephen Albin said the Sydney housing situation is “clearly in crisis” when measured against other capitals.
“Sydney is struggling under the weight of a rapidly growing population combined with what was essentially a trickle of new housing for more than a decade,” he said.
“While housing start figures are improving, that chronic undersupply still exists.”
Mr Albin said lot sizes are also shrinking at record levels in response to the demand for housing.
“The situation in Sydney is so pressing that we have seen a 12 per cent drop in housing block sizes over the past year in new residential areas,” he said.
“Over the past year, the price for a block per square metre has jumped a whopping 18.7 per cent or $119.”
Mr Albin said the NSW government needs to take immediate measures to improve the situation.
“As a priority, the state government needs to introduce planning reforms that remove unnecessary duplications in approvals processes and limit costly delays,” he said.
He also said there needs to be a greater state government focus on local infrastructure delivery and the land tax system needs to be reviewed.
[Related: Sydney ‘overvalued by 25 pc’]