Saturday, October 25, 2008

Puzzles about Sydney residential land shortages

I am still working my way through the latest NSW population projections, hence the delay in posting. However, I did want to record one thing that puzzles me.

Most of the discussions about the need to find more residential land in Sydney focus on the outer suburbs targeted as growth areas. Leaving aside the macro question of the likely aggregate demand, and this is likely to be less than projected because of foreshadowed migration cut-backs, the issue in my mind is whether people will actually want to live there.

I haven't thought this through, but my gut judgement is that a significant proportion of the projected population increase is likely to want to live in other areas. If this is true, then all the projected investment in residential development and supporting infrastructure may yield low returns.

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