Jess has inspected around 100 properties in her quest to find a three-bedroom apartment suitable for her family, which now includes a newborn baby. Tracking down and securing an apartment across the pond has proven to be even more arduous. Sydney in particular has a deeply ingrained scarcity of apartment size diversity. That’s a clear lesson from today’s real estate reality. It’s long been the case that apartments only fully accommodated singles and couples, forcing families to look elsewhere for housing.
The median price of a three-bedroom dwelling in Sydney has jumped 18.1 percent between March 2023 and March 2024. In real dollars, it’s now closer to $1.3 million on average. The average cost of a two-bedroom apartment is just under $500,000 less. This funding gap poses a true insurmountable barrier to families such as Jess’s. The recently released 2021 Census data reveals that less than 16 percent of properties in Sydney have three bedrooms or more. This points to a grave lack of available larger homes for families seeking additional space.
Jess, who has three post-graduate degrees, is getting more and more shut out of the housing market. She and her children are squatting in a one-bedroom apartment. They need the additional bedroom because they are expecting a second child. The emotional and physical demands of apartment searching have already run her family ragged.
“Taking a three-month-old out on a Saturday for inspections is just hideous … she has started hating the car, so it’s become even worse,” Jess expressed, reflecting the frustration and exhaustion that accompany their search.
Real estate agents note the growing volatility of the market, due in part to rising labour and building costs since the onset of the COVID-19 pandemic. As Gautier Lam states, this has led to rapidly increasing prices and a lack of available and appropriate properties. Now, the competition for three-bedroom apartments has grown more cutthroat, with some nearby listings deceptively promoting converted dining rooms as bona fide bedrooms.
Michael Fotheringham notes the ambiguity in property listings: “Listings of properties and the number of bedrooms are open to some interpretation — you’ll often get a three-bedroom property that might more accurately be called a two-and-a-half bedroom property.” This inconsistency deepens Jess’s search—it can’t just be what’s in fashion.
On one of her most recent inspections, Jess inspects a three-bedroom apartment in Ashfield. This beautiful house, worth about $1 million, in an inner-west Sydney suburb sold pre-auction for $1.21M—a whopping $200,000 over asking price—showing just how cut-throat competitive things have gotten in the market right now. Jackie Wang, the real estate agent handling the listing, remarked, “For this particular apartment we’ve had close to a hundred inquiries … and so far had more than 40 groups through the open rooms.”
The deficit of affordable, available three-bedroom units has created a more and more dire predicament for families. Jess expressed her frustration: “We’re just so desperate … I’m just at the stage where I don’t care — I don’t need to see it. If [my partner] likes it, that’s good enough and we’ll just take it.” This statement really highlights the urgency that so many families are experiencing as they try to maneuver through this brutal market.
Fotheringham further elaborates on the issue, stating, “We need more diversity of our supply stock, more range of different sizes of apartments. It’s a real challenge in our system because the way we develop property tends to work to volume building.” The requirement is to deliver 1.2 million new homes by 2029. That goal is starting to feel like a pipe dream, as we are now 262,000 homes short of meeting demand.
Data insights — Hot trends in pricing indicate that there is consistent and persistent demand for larger, family-sized apartment units. Buyers are paying a premium price per square metre on two-bedroom units compared to three and four-bedroom units. “It’s volatile at the moment because there’s such a severe lack of stock for three-bedroom units,” Gautier Lam noted.
Jess’s struggles go beyond just physical space. They impact her family’s relationships. “My partner sets up in the lounge room and you can imagine what that’s like — trying to manage a baby while he’s on an online call,” she explained. More space to live translates into more comfort for family households. Perhaps even more important, it does more to spur family members to become involved in their children’s lives.
“We’d really love for [our parents] to come and stay with us and be part of our kids’ lives in a more intense way,” Jess said. “Every time my parents come to Sydney, they have to get an Airbnb.” This clarity both captures the deep ways in which poor housing undermines family bonds and support systems.
