North Sydney’s recently approved 87% council rate hike is causing significant concern for residents, particularly renters and older homeowners. The steep increase, which will be implemented over two years, primarily aims to address a cost blowout related to the redevelopment of the heritage-listed North Sydney Olympic Pool. Experts and community leaders have voiced strong objections, highlighting the potential financial strain on tenants and homeowners in an already challenging housing market.
Impact on Renters and Property Investors
Real estate professionals, including Thomas McGlynn, President of the Real Estate Institute of NSW, have warned that the rate hike could disproportionately affect property investors. These investors, facing reduced returns, may consider selling their properties or passing the increased costs onto tenants. McGlynn stated, “If you’re an investor, this will impact your returns, and some might think it’s better to cut their losses.” He also pointed out that any additional costs borne by landlords often get passed down to renters, exacerbating the housing affordability crisis.
With more than half of North Sydney households being renters, McGlynn expressed disappointment at the council’s decision, especially considering the ongoing housing crisis. He noted that pensioners, in particular, may struggle with the additional financial burden, which is compounded by the current cost of living challenges.
Rising Rent Costs
Leo Patterson Ross, CEO of the NSW Tenants Union, strongly criticized the rate hike, urging landlords not to transfer the financial strain to tenants. He pointed out that rents in the area have already surged significantly, with two-bedroom apartments seeing an increase of $400 in the past year alone. Since the pandemic, average rents have risen by $4,000 annually.
Patterson Ross emphasized the need for measures to reduce rent costs, suggesting that many tenants, including essential workers like hospital staff, are finding it increasingly difficult to afford housing. “There’s no clear justification for these rises,” he added, expressing concern that the rate hike would further tighten the already unaffordable rental market.
Concerns Among Homeowners
Real estate agents report that many homeowners in North Sydney are feeling the pinch, especially those who are “cash poor but asset rich.” Stephen O’Sullivan of BresicWhitney noted that some homeowners are anxious about the rate increase, though he doesn’t foresee a mass exodus of older residents listing their properties for sale. He remarked, “There’s a lot of uncertainty, and people aren’t sure what to do.” However, he acknowledged that “every case is different,” suggesting that some may eventually be forced to sell due to financial strain.
Nigel Mukhi of McGrath McMahons Point also indicated an increase in property listings compared to last year, suggesting that an influx of properties onto the market could drive down prices. Mukhi noted that the dynamics of supply and demand would likely affect different areas differently, with more abundant apartment listings potentially intensifying competition among buyers.
A Lack of Empathy, According to Critics
Former North Sydney councillor Ian Mutton criticized the council for a perceived lack of empathy, particularly toward older homeowners and young families. Mutton condemned the decision to increase rates, labeling it “outrageous” and accusing the current council of creating an illusion of a financial crisis. He contended that many of the repair works justifying the rate hike were unnecessary in the current fiscal period.
Mutton expressed concern that the rate hike would place undue pressure on older homeowners, many of whom are asset-rich but face limited income. He warned that this could lead to forced sales, exacerbating the financial challenges for those who are already struggling. “The current council has a lack of empathy for people, both older people and young families starting out,” he said.
The situation in North Sydney reflects broader concerns about the affordability of housing in Australia, where renters and homeowners alike are grappling with rising costs and a tightening market. As the rate hike is set to take effect, many will be watching closely to see how it affects the region’s housing landscape in the months to come.
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