Workers flee Sydney's unaffordable housing

“Sydney must stop growing sooner or later”, demanded Clive Hamilton of the Australia Institute recently. “If the ‘endless growth’ mentality is not reversed”, he continued, “in 20 years time we will be reading in the Herald of the next plan to lever an extra million or so residents into a bursting metropolis”.

Hamilton hopes to turn back the tide. His anti-growth outburst is pure wind, even though the accompanying prediction may prove accurate (the New South Wales Government plans for an additional 1.1 million people by 2030).

Perhaps Hamilton missed the significance of last year’s astounding United Nations forecast. More than half the world’s six billion people will be urbanised by the end of 2007. Several factors are driving this population drift to cities. Rates of progress vary between developed and developing nations of course, often starkly, but a world-wide pattern is clear. Changing forms of land tenure, new agricultural techniques and technologies, and shifting patterns of consumption, mean fewer people can, or in some cases need to, extract a living from the land. Still, population growth rolls on.

At the same time, globalisation and economic deregulation are transforming urban regions, creating zones of opportunity where diverse markets for all types of goods and services emerge in the wake of international trade flows.

On a vast scale, manufacturing is gravitating to the fast growing megacities of the developing world, where millions are leaving subsistence farming behind. In the spreading cities of the developed world, traditional manufacturing struggles to keep pace with building construction, high-tech and services. A profusion of small operators are sprouting all over suburbia, offering services ranging from software design to discount retailing to weekend lawnmowing.

Developed and developing nations alike face the challenge of settling growing urban populations.

Australia is no exception.

Contrary to received wisdom, enquiry into this complex field suggests our cities must expand or slide into a phase of slow decline. In the wake of drought, the Stern Review and now the IPPC fourth assessment report, climate change hysteria sweeps all before it.

The intractable crisis of home ownership and affordability, on the other hand, commands only fitful attention. For thousands of working Australians, the backbone of our suburbs, this is where our most serious social and economic challenges intersect. Acquiring decent accommodation for their families means taking on increasingly oppressive burdens, and this has wide-ranging consequences for the vitality of our urban regions. Surely, discussion about the future of our cities starts here.

Throughout its history, Sydney has been a magnet for aspiring newcomers from all over Australia and the world. So when newspaper headlines start to declare “Workers flee Sydney as rents rise”, something has changed.

No doubt, the city continues to grow and to attract affluent settlers from local and foreign sources (mostly foreign: since 2001 Sydney has drawn 76 per cent of its population growth from overseas). And some city dwellers are moving to the country or the coast in pursuit of a lifestyle dream (the so-called “sea-changers” and “tree-changers”). But increasing numbers of low to middle income earners are being squeezed out against their wishes. NSW's population growth slowed from nearly 90,000 in 2001 to 53,000 in 2004. This fall was partly due to a net loss in population that year of 26,000 from interstate movements.

The housing affordability numbers are bad and getting worse. According to a recent Reserve Bank review, 35 per cent of households now have a mortgage compared to 27 per cent a decade ago and the number of NSW mortgage holders with repayments overdue more than 90 days rose by twice the national average.