Housing, home ownership and household savings - chapter 3

Housing, home ownership and household savings in NSW

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2021-22 NSW Intergenerational Report, chapter 3 - housing

[Speaker]

Housing is essential for our wellbeing and home ownership is key to securing an independent retirement. NSW will require 1.7 million more homes by 2060 61 to support a growing population. Apartments are expected to make up around one-third of new housing as undeveloped land in our cities becomes more scarce. To help increase home ownership and grow the NSW economy the government is considering a once in a generation change of giving home buyers the choice to opt into a new property tax or continue to pay stamp duty you.

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Housing is key to economic security and quality of life. By 2060-61, NSW will need an additional 1.7 million homes, equivalent to 1 new home for every 2 existing homes. This means we’ll need to add an average of 42,000 new homes every year, which will be challenging. 

Homeowners typically enjoy much higher living standards in retirement, but home ownership rates have been declining as deposits become more expensive. Building enough housing, and higher interest rates compared with today’s historic lows would moderate long-run housing price growth.

By 2061

Insights and opportunities

• NSW is projected to require 1.7 million new homes by 2060-61. That’s equivalent to 1 new home for every 2 existing homes.
• NSW will need to add an average of 42,000 new homes every year, which will be a significant challenge.
• The average number of people per household is projected to decline from 2.5 today to 2.3 in 2060-61.
• Housing affordability is a key challenge, with the time taken to save for a deposit having increased from 6.6 years in 1996 to 11.5 years in 2020.
• Home ownership is key to building a secure and independent retirement. Household disposable incomes for homeowner retirees are more than double those of non-homeowners.
• Property tax reform would lower the deposit barrier and make it easier to move home. It would increase the home ownership rate and support higher productivity.