By Stella Qiu
SYDNEY (Reuters) -Australia’s affordable housing push has arrived in the wealthy Sydney suburb of Mosman, where new planning laws now challenge longstanding resistance to development in the leafy area known for mansions and sweeping harbour views.
State authorities in Sydney and Melbourne – Australia’s two biggest cities – are stripping some planning powers from suburban councils, including ones like Mosman that have created national headlines over opposition to new housing from older, wealthier constituents.
The broad policy shift comes as political deference to NIMBY (Not In My Backyard) sentiment gives way to demands for more housing from younger voters whose electoral heft now rivals the traditionally powerful baby boomer bloc.
In Mosman, there are fears the reforms will ultimately alter the character of the suburb, which boasts natural beauty, high-end stores and a median house price of over A$5 million ($3.23 million).
“We’re surrounded by water with harbour views so there are people who are going to have literally millions of dollars knocked off the value of their property because their view will be blocked,” said Simon Menzies, an elected Mosman councillor of 20 years.
The new laws are designed to allow more housing at key transport and commercial hubs and give the New South Wales state government powers to override council objections to large developments.
Similar rules to fast-track three-storey apartment blocks have been introduced in Melbourne’s state of Victoria.
Five kilometres from Mosman, a new metro line in the suburb of Crows Nest means the state government has given a 22-storey apartment building the green light, overriding years-long council opposition.
In Mosman, objections from neighbours to one such proposal are already pouring in, but the council said there is little they can do about it.
The government intervention tracks a broader international trend, particularly in high-demand markets like London and California where soaring costs have hampered home ownership for young people.
Sydney’s house prices have surged more than 30% over the past five years, outpacing wage growth.
New South Wales Premier Chris Minns warns Sydney, the state’s capital, risks becoming “a city with no grandchildren”.
It is already the second-most unaffordable city globally after Hong Kong.
“Their narrative is get out of our way. We want to build as many homes as possible to enable young Sydney residents to buy their homes,” said Kos Samaras, director at polling firm Redbridge.
“I think the political ballast that was there to protect the interests of homeowners is now gone.”
THE CASE TO BUILD
Australia’s sprawling cities are among the world’s least densely populated and historically built to accommodate suburban aspirations of owning detached houses with large backyards, not apartment living.
That has shifted in recent decades, particularly as waves of immigrants and students settle in high-rises around public transport hubs.
The latest housing push is designed to fill in the “missing middle” – townhouses, terraces and low-rise residential flats, which typically meet opposition from councils.
Research from the Productivity Commission showed industry is only building half as many homes per hour, compared with 30 years ago, hampered in part by approval processes that can stretch more than a decade.
Federal Housing Minister Clare O’Neil said 40 years of state, local and federal government regulations have created an impenetrable “wall of bureaucracy” for anyone trying to build a house.
“I think we’ve reached a tipping point here where the majority of our population are actually in housing distress themselves or are deeply concerned about the people that they know, especially that younger generation,” O’Neil told Reuters. After her party’s landslide victory in the May federal election, O’Neil is pledging “bigger and bolder” policies. A productivity roundtable this month presents an opportunity to remove some of those requirements, she added.
The turnaround may have already started.
Building approvals of apartments surged almost 90% in the first half of the year, driven by a 33% jump in New South Wales. Construction jobs jumped 20% in the three months to May and construction starts of higher density homes rose over 20% in the first quarter.
Peter Tulip, chief economist at the Centre for Independent Studies, expects a substantial step-up in construction in New South Wales and Victoria from 2026 onwards.
However, supply will still struggle to meet demand, pushing prices higher. Indeed, national home prices have hit fresh records each month, fuelled by rate cuts and the expectations of more to come.
Justin Simon, chair of housing advocacy group Sydney YIMBY, said Mosman had great amenity and was exactly the sort of place where new housing was needed.
“There is no way an ordinary person, essential workers, cleaners, nurses or anyone else could ever afford to live in Mosman and that is because for decades they have stopped new homes being built and we need to turn that around,” he said.
MONEY TALKS
Some Mosman property owners impacted by policy changes are joining forces to sell entire blocks to developers, capitalising on strong demand for higher-density housing in the harbourside suburb.
The first application under the new policy, for example, is a six-storey residential building near the main town centre, comprising 29 dwellings, most of which are the family-sized three-bedroom units Sydney lacks.
Objections cited issues such as traffic, road safety, parking and privacy concerns, public submissions to the council showed.
“These are mainly three-bedroom units, each with double beds, so the total number of eyes that will be looking into this area (my backyard) would be 110,” said a neighbor of the development, who has lived in Mosman since 1999 and asked to remain anonymous.
“If they’re all occupied, it’s 110 eyes looking every time I hang my underwear outside.”
While that local backlash could yet create wider pressure for the government, politicians for now are siding with what they see as demographic inevitability.
“Sydney, Wollongong, Newcastle – these cities aren’t museums,” said Paul Scully, New South Wales planning minister. “They need to grow and evolve and adapt and change in the same way our population changes.”
($1 = 1.5482 Australian dollars)
(Reporting by Stella Qiu; Additional reporting by Peter Hobson in Canberra; Editing by Sam Holmes)
