Who knew a jab about avocado toast back in 2017 would kick off one of the greatest generational feuds of all time? Boomers vs. Millennials is the default headline these days, but when it comes to Australia’s housing supply crisis, neither gen is throwing punches. Instead, they’re coming to find they’re facing a shared adversary—the missing middle.
Despite retirees being eager to free up their large family homes for younger generations, the scarcity of apartments and townhouses in affluent “missing middle” suburbs of Sydney—including Castle Cove, Concord, Earlwood, Frenchs Forest, Lindfield and St Ives—has made it difficult for Baby Boomers to downsize, and as a result, Millennials to upsize.
The term “missing middle” refers to the absence of diverse housing options between single-family houses and high-rise apartments. Many well-to-do suburbs in Sydney predominantly offer detached houses, leaving limited choices for residents looking to stay in the area but move into smaller dwellings. This ‘missing middle’ represents a significant gap in the city’s housing supply.
Several factors have contributed to the shortage of “missing middle” homes in Sydney, and across Australia. Stringent planning regulations, restrictive zoning policies, and limited land availability have all inhibited the construction of medium-density housing. There’s also a lack of incentive for developers, who instead focus on high-rise apartments which yield higher profits.
But some are directing the blame at state and local governments for their failure to streamline development approvals—or in some cases, rejecting planning permits all together—for missing middle dwellings near public transport, making it near impossible for both older and younger generations to find appropriate accommodation in sought-after areas.
Research recently published by The Australian Financial Review suggests that local councils in missing middle suburbs may need to be stripped of their ability to halt construction and inflate development costs at the behest of “NIMBY” locals. Data suggests that we could have built 1.3 million more homes in Australia over the past 20 years if not for state and local governments wrapping the town in red tape.
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Over the 20 years to 2021, housing supply has expanded at just 4.5% ahead of population growth, according to AFR’s report. Compared with the 17% increase of the previous 20 years, this is cause for alarm, and has resulted in a shortfall of over 383,100 homes in NSW. Construction of multi-unit dwellings has dropped from a peak of 118,000 in 2015-16 to about 70,000 in 2022-23.
Instead of housing stock increasing by 220,000 dwellings a year, we are clocking in at around 153,000. With the federal budget forecasting the arrival record of 1.5 million immigrants at the same time new home building drops to a 10-year low, the housing crisis in Australia is set to intensify even further.
For Sydney to meet the housing needs of its residents—both young and old—the gap caused by the scarcity of missing middle homes needs to be filled. An easier, more home-builder-friendly planning and approvals system needs to be put in place so that downsizers can free up homes for the next generation. Finally, something we can all agree on. The definition of a healthy work/life balance, on the other hand…
