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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 2021 forecast has some enhanced features: it is now available to download at ASGS 2016 Statistical Areas Level 2 (SA2) and greenfield precinct level.

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

This is an infographic giving an overview of the Sydney Housing Supply Forecast, and the aspects of city building it supports. It contains several icon images of buildings, cranes, trees and a cyclist to represent a city. The text is as follows. The Sydney housing supply forecast details where, when and how many new homes are likely to be built in the city. It supports planning for Sydney’s future. It supports infrastructure planning, including: - The delivery of public transport, motorways and corridors - Education and health facilities. It supports service delivery, including the delivery of; - Water reservoirs, pumping stations and pipes, - Electricity and gas. It supports strategic planning, including the delivery of: - Housing types, parks and open spaces - Land use zoning

View a larger version of the Sydney housing supply forecast infographic

Key messages of the 2021 Sydney housing supply forecast

  • The department is forecasting that from 143,400 to 161,300 new homes could be built over the next five years (2021-2022 to 2025-2026) across three scenarios.
  • The medium growth scenario forecasts 151,500 new homes over the five years from 2021-22 to 2025-26. This represents the most likely outcome based on market conditions and demand factors at the time we finalised the forecast in October 2021.
  • 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 over the last 18 months. Australia’s international borders closed in March 2020 and had partially reopened by November 2021. The full economic and social consequences of the pandemic for NSW and Sydney are still unknown but will be felt going forward.

The 2021 medium growth scenario, which is based on market conditions in October 2021, forecasts the building of 151,500 new homes over the five years from 2021-22 to 2025-26.

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 between 143,400 to 161,300 new homes could be built over the next five years (2021-2022 to 2025-2026) based on one of three scenarios.

Context

The housing construction market

The past five years represent a record high in delivering Sydney housing, with around 181,000 new homes built between 2016-17 and 2020-21. In the 2018-19 financial year alone, around 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 the 2020-21 financial year the Sydney housing market continued a relative slowdown, with housing completions falling to around 29,800. 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.

Inputs and Approach

The forecast approach considers:

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

A new feature that has been added for the 2021 forecast is the department has released data at ASGS 2016 SA2 and greenfield precinct level which provides additional spatial detail.

For more information, check out the following sections:

Greater Sydney Urban Development Program (UDP) dashboard

The Greater Sydney Urban Development Program (UDP) is the NSW Government’s program for monitoring housing and employment land supply and assisting infrastructure coordination in Greater Sydney. The Sydney Housing Supply forecast is visualised on the UDP dashboard, with full details on the housing supply page.

View the UDP dashboard.

Data download

Download the 2021 Sydney Housing Supply Forecast data (XLSX, 122 KB).

5-year housing supply forecast for Greater Sydney by Local Government Area (LGA), District, Suburb, SA2 and Greenfield Precinct.

Page last updated: 11/08/2022

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Key points

The Sydney Housing Supply Forecast is:

  • An estimate number of new dwellings under current zoning and planning controls and scenario specific conditions
  • Updated yearly
  • Available by LGA and suburb