Sydneysiders know the scale of the city’s housing problem intimately. For some, this experience is deeply personal - spending weekends waiting in lines to inspect a rental property, or having given up on trying to save for a deposit. It’s also being felt by business owners who can’t attract and retain talented people, and by communities where art and cultural activity is being priced out.

On one level, expensive housing is a sign of success. When a city is attractive, many people want to move to, live in and put down roots in a city, and with increased demand, prices tend to rise. Sydney is not alone in this challenge. In many successful cities around the world it’s becoming more unaffordable to own or rent a home.

Yet there is now a growing body of evidence that shows when housing becomes chronically unaffordable it gives rise to hidden, obscured and unaccounted costs. This paper puts Sydney’s housing challenge in an economic context by scanning current international evidence and case studies from other global cities experiencing the same challenge. It then reviews the likely cost to Sydney from unaffordable housing for our productivity, talent, and innovation economy – finding that this is costing Sydney in excess of $10 billion per year.

This paper is a conversation starter. Its main purpose is to frame the scale of Sydney’s housing challenge and bring the costs of inaction to the fore.