Glaring reason young people are ditching the city

Thousands of young people are packing up and getting out of the city. The trend coincides with a decade-long hike in housing costs.

The soaring number of young Sydneysiders ditching the city has coincided with a decade-long increase in housing costs, which now outstrips the inflated wages once relied on to make living here worth it.

The number of Sydney residents aged in their 30s leaving the city has almost doubled in the last five years, compared to the five-year period before it, according to new analysis by economic research group the e61 Institute.

Between 2016 and 2021, 38,121 residents aged between 30 and 39 left Sydney – compared to 20,966 between 2011 and 2016.

The exodus is mirrored by a jump in housing costs across the decade, with research compiled by the institute showing the housing cost gap between Sydney and the rest of NSW is now bigger than the wage gap, with the cost of housing outstripping wages in Sydney since 2012.

In 2012, the difference between Sydney and rest of NSW in average annual real wage earnings was almost $13,000 – while the difference between Sydney and the rest of NSW in housing costs was $11,000.

Thousands of young people are leaving Sydney. Picture: Justin Lloyd.

Since then, that figure has flipped – with soaring housing costs exceeding the extra amount of money a Sydney-based resident earned.

As of 2022, the difference between Sydney’s average annual real wages and the rest of NSW was $16,000 – while the difference in housing costs between the two was $24,000.

At the same time, state-level dwelling completions data show that from 2011 to 2021, Victoria built around 15 per cent more dwellings than New South Wales – despite Melbourne’s population being around nine-tenths of Sydney’s in 2011.

Parramatta MP Andrew Charlton – a former chief economic adviser to Kevin Rudd – said he was concerned by the jump in people in their 30s leaving the city.

Parramatta federal Labor MP Andrew Charlton says the exodus from Sydney underlines how urgently the issue of housing needs to be addressed.

“This underlines how urgently we need more housing in Sydney – we are at risk of having suburbs where there aren’t any grandchildren because people can’t afford to raise a family here and have to leave,” he said.

“It used to be the case Sydney was expensive, but the higher wages justified the higher house prices – but that’s just not true anymore.”

Gianni La Cava, research director at the e61 Institute, said their studies showed a single wage-earner would struggle more than ever to afford a home in Sydney.

“It’s true that people in Sydney compared to everywhere else get paid higher wages, and that hasn’t changed over the last 20 to 30 years. It’s true (though) … The net return to living and working in Sydney has definitely diminished over that time,” he said.

“The fact that people are having to couple up to afford housing – maybe 20 to 30 years ago a single person could afford a home in Sydney, but that’s no longer the case.”

Camila Llanos, 29, said the cost of living crisis is forcing her to think about living somewhere else than Sydney.

Camila Llanos, 29, is forced to think about living somewhere else due to the cost of living crisis. Picture: Justin Lloyd.

“My friends and I love living in the city because we are young. But I’ve considered moving out of Sydney because rent is more affordable,” she said.

Ms Llanos, who works two jobs at two cafes to make ends meet, said one of her friends just moved to Melbourne because they couldn’t find a rental.

“Public transport in Sydney is expensive. I work less than an hour away from the city and I spend so much money on it. I work in a customer service industry, and we struggle to pay weekly rent.”

“I will certainly consider moving in the future”.