Sydney housing supply forecast

The Sydney housing supply forecast is the best available NSW government information on where, when and how many new homes are likely to be built in the Sydney area in the next five years.

The Sydney housing supply forecast is an annual product that informs us about potential future housing supply. It is not an indicator of underlying housing demand.

The 2020 forecast has some enhanced features: it is available at the suburb level and includes scenarios that specifically respond to the uncertainty resulting from COVID-19.

The Sydney housing supply forecast is critical for strategic planning decisions both inside and outside government, as well as for monitoring expected housing supply in relation to underlying housing demand.

Figure 1. Sydney housing supply forecast

View a larger version of the Sydney housing supply forecast infographic

Key messages of the 2020 Sydney housing supply forecast

• The department is forecasting that from 132,800 to 171,200 new homes could be built over the next five years (2020-2021 to 2024-2025) across three scenarios.
• The central base case scenario, which represents the most likely outcome based on market conditions and demand factors at the time we prepared the forecast in October 2020, forecasts 154,550 new homes over the five years from 2020-21 to 2024-25.
• The share of housing supply expected to be delivered across the five Sydney Districts —Central City, Western City, Eastern City, North and South — is similar under the different scenarios. The most development is forecast to happen in the Central City and Western City Districts.
• Despite the impacts of COVID-19, the NSW population will continue to grow, and underlying demand for housing will remain strong. There is a need to continue to deliver new housing to meet the needs of a growing and ageing population

COVID-19 has had major impacts on the way Australia functioned in 2020. Australia’s international borders closed in March 2020 and had not reopened by December 2020. The full economic and social consequences of the pandemic for NSW and Sydney are still unknown.

The 2020 central base case scenario, which represents the outcome based on market conditions in October 2020, forecasts the building of 154,550 new homes over the five years from 2020-21 to 2024-25.   

This year, the department has developed and released three scenarios to address the uncertainty surrounding COVID-19. These scenarios reflect the potential outcomes for the housing market based on varying economic and demand factors over the next five years. Based on the scenarios, the department is forecasting that from 132,800 to 171,200 new homes could be built over the next five years (2020-2021 to 2024-2025) based on one of three scenarios.

Context

The housing market

The past five years represent a record high in delivering Sydney housing, with 180,000 new homes built. In the 2018-19 financial year alone, 42,400 homes were completed. This is the highest number ever recorded in one year. This high level of growth occurred on the back of strong housing approvals and commencements, a healthy economy and record low-interest rates. However, in financial year 2019-20, the Sydney housing market began a relative slowdown, with housing completions falling to 32,464. This slowdown in part reflects the uncertainty surrounding the COVID-19 pandemic.

Demand for housing

COVID-19 has been an unprecedented disruptive force, but both the Sydney and NSW population will continue to grow. This means demand for housing will also continue to grow and we need to plan for the homes demanded by a growing and aging population (see Population Annual Insights 2020).

Inputs and Approach

The forecast approach considers:

• current pipeline of residential development
• analysis of likely future development under current zoning and planning controls
• information from state and local government and industry
• factors reflecting the outlook for housing demand and market conditions.

There are a few key differences between the 2019 and 2020 forecast. The department has:

• released suburb level data that provides more spatial detail
• released scenarios that specifically respond to the uncertainty resulting from COVID-19.

For more information, check out the following sections

• Forecast insights
• Other forms of housing
• Explanatory notes, glossary and data downloads

Interactive dashboard

With the interactive dashboard (Figure 2), you can search the five-year housing supply forecast across all scenarios for Greater Sydney by district (Central City, North, South, Western City, Eastern City) and local government area (LGA).

With the dashboard, you can choose a district or LGA (or multiple selections under those categories) as well as one of the three scenarios, to show the five-year forecast by your chosen scenario and geography. The map visually filters the data.

You can get similar information by downloading the Excel spreadsheet underneath Figure 2.

Figure 2. Interactive dashboard

Data download

Download 2020 Sydney Housing Supply Forecast data (XLSX, 98KB)

5 year housing supply forecast for Greater Sydney by Local Government Area (LGA) and by District.

Note: The low growth forecast five-year total figure and low growth forecast FY2020-21 figure were amended at 15/02/2021 in accordance with our continuous checking processes.