Why Melbourne's up us for the rent

Credit: The Daily Telegraph
SYDNEY is poised to lose its position as the nation's leading city, with a lack of housing driving migrants south to Melbourne.

The exodus will see Melbourne overtake Sydney's global city status in population, migration and economic growth by 2037, a BIS Shrapnel report has forecast.

Within five years, life in Sydney would also be tough, with all rental stock occupied and housing affordability pushed beyond critical.

Figures revealed under Freedom of Information showed Sydney stood to fall short of its housing targets by 27 per cent, delivering about 180,000 new homes by 2013 instead of the 245,000 State Government target. More than 13 Sydney council areas are up to 1229 dwellings short of meeting the Metropolitan Strategy, allowing Melbourne to grow "much more rapidly than Sydney".

To meet the strategy, Camden requires a four-fold increase in construction, Canterbury needs to increase three-fold, and Campbelltown, Hawkesbury and Auburn need to double, developer lobby Urban Taskforce CEO Aaron Gadiel said.

Sydney's size advantage, the report said, had lost 20 per cent to Melbourne over the past eight years and if construction continued to "limp along", population growth would fall from the Strategy's projection of 1.1 per cent a year to just 0.9 per cent.

"This will mean that Melbourne, with its long-term population growth of 1.3 per cent a year, will displace Sydney as Australia's largest city by 2037," BIS Shrapnel senior economist Jason Anderson said. Forecasters expected under-supply would push the Sydney market over a "critical affordability ceiling" over the next five years.

"If Melbourne overtakes Sydney in people and housing then Sydney loses its relevance as the commercial heart of Australia, and status as a global city," Mr Gadiel said.

"Our city is fading. We can't expect Sydney to remain the premier city and stop or reduce housing construction."

With the State Government handing down its report card on land supply later this week, a spokesman for Planning Minister Tony Kelly said NSW was set to meet the challenge to its status.

"Sydney is the nation's only international city, which means it is a super magnet for interstate and international migration and growth," he said.