Bums on seats driving the Sydney housing boom

Jobs, more than investors, drive the Sydney housing boom.


Jobs draw people to want to live in Sydney, jobs enable people to nearly afford to live here by renting the properties investors own, jobs bring people to work in Sydney even though they don’t live here.

On a Sydney CBD construction site, conversation with a carpenter turns to where he lives – in one of Brisbane’s outer suburbs. He’s fly-in-fly-out every second week, leaves Brisbane early Monday morning, is accommodated with other workers in a serviced apartment, goes home that weekend.

Sydney’s been our clear FIFO capital ever since the resources investment boom peaked, but it’s ramping up to a new level.

For some time, the engineers who used to fly north and west from Brisbane have been flying south. Now it’s tradespeople and consultants of every type and description.

It’s why Sydney is sometimes full. Between the FIFOs and the strong tourism flows, it only takes an extra event – a major concert, for example – to get the “no vacancy” signs out and send the price of the few remaining hotel and motel rooms through the roof.

It’s also part of the reason Sydney Airport is increasing its lead in domestic passenger movements. Federal government statistics show Sydney’s regular public transport (RPT) passenger movements grew by 3.4 per cent to 26.96 million in the 12 months to the end of January. Melbourne (our other boom city and one with more airports) grew by 3.2 per cent to 24.87 million.

That compares with 2.4 per cent growth in national RPT passengers and Sydney’s growth rate of 2.3 per cent in 2015. Sydney accounts for 22.8 per cent of the nation’s total domestic traffic, Melbourne for 21 per cent with a large whack of that double counting.

All those bums on seats in and out of Sydney certainly aren’t workers. Some are international travellers who’ve entered through Sydney and we’re also holidaying domestically in record numbers as those growing Sydney jobs pay for local jaunts as well as our love affair with international travel.

Of the top 50 domestic routes, four managed double-digit growth in the January year: Sydney – Hamilton Island up 16.6 per cent, Sydney – Hobart 12.9, Melbourne – Sunshine Coast 10.8 and Sydney – Sunshine Coast 10.2.

Those destinations obviously are tourism centric, but there’s some FIFO in there as well.

Outside the top 50, Sydney – Ayers Rock passengers were up 16.1 per cent and those on the Brisbane – Hamilton Island route 13.5 per cent.

The sky warriors’ staple, the Sydney – Melbourne shuttle, recorded 8.92 million RPT passengers, up 3.1 per cent.

As well as the rise and rise of Sydney, the Bureau of Infrastructure, Transport and Regional Economics’ domestic travel stats chronicle the other side of the employment coin.

Three routes in the top 50 suffered double-digit falls:, Perth – Karratha 19.1 per cent, Brisbane – Gladstone 18.4, Perth – Port Hedland 10.9 per cent

Perth finally has a decent airport to cope with boomtime passenger traffic just as passenger numbers there decline. Of the top 10 Australian airports, the WA capital was the only one to record a fall in domestic passengers, down 3.2 per cent.

The total picture indicated by domestic passenger traffic is confirmation of a well-known story. The Australian economy overall is doing all right, growing quite nicely.

Our domestic airlines clocked up 69.5 billion revenue passenger kilometres (RPK) in the 12 months, 2.1 per cent more than in 2015. This year is off to a strong start as well with 5.96 billion RPKs in January, 2.7 per cent above the previous corresponding month.

But the growth is not evenly spread. The regions that are facing weaker investment are returning to earth, while Sydney takes off on a virtuous cycle of infrastructure investment promoting growth that provides the wealth and the jobs to fund infrastructure investment that promotes growth and provides the wealth and the jobs to fund infrastructure investmen

And it all means the pressures on Sydney housing aren’t going away any decade soon.

Footnote: The statistics in the accompanying video are for the 2016 calendar year. They’ve been updated for the January 12 months in this article.