We forecast around 119,400 to 138,550 new homes will be built in Greater Sydney over the next 5 years (2022–23 to 2026–27) across 3 growth scenarios.
The medium-growth scenario estimates construction of 128,450 new homes and represents the most likely outcome based on analysis of market conditions and demand factors in November 2022.
The low-growth and high-growth scenarios reflect alternative outcomes if the impacts are more or less substantial than anticipated under the medium-growth scenario.
How many new homes will be built in Sydney
| Year | Low-growth scenario | Medium-growth scenario | High-growth scenario |
|---|---|---|---|
| 2022-23 | 19,250 | 20,250 | 21,250 |
| 2023-24 | 21,600 | 23,500 | 25,550 |
| 2024-25 | 26,050 | 27,550 | 29,200 |
| 2025-26 | 25,650 | 27,650 | 30,000 |
| 2026-27 | 26,850 | 29,500 | 32,550 |
| Total | 119,400 | 128,450 | 138,550 |
Why there are fewer new houses and apartments
The 5-year forecast (around 119,400 to 138,550 new homes) is less than the past 5 years of supply (171,500 new homes). This is partly attributable to record high years of supply in 2017–18 and 2018–19, when more than 42,000 new homes were built each year.
The apartment market dropped substantially during the 2 years of COVID-19 restrictions, while the detached housing market performed strongly.
These conditions strongly influenced potential outcomes over the next 5 years.
The forecast anticipates housing supply will trend upwards once the impact of external events subsides.
Major drivers of the forecast decline include:
- the housing market impacts of COVID-19
- a pre- and post-COVID-19 housing market slow-down, briefly stimulated by HomeBuilder and changing housing preferences
- continued decline in the number of homes under construction
- fewer housing approvals
- the high proportion of projects in the development pipeline approved for development but not progressing to construction
- external factors including the war in Ukraine and catastrophic local weather events that indirectly affected the NSW construction industry in 2022.
Where most of Sydney's new homes will be built
We forecast that over the next 5 years:
- 55,370 new homes will be available in Central River City
- 41, 550 new homes will be available in Eastern Harbour City
- 31,530 new homes will be available in Western Parkland City.