It’s one of the most expensive areas in the world – a real estate market dominated by high rises only affordable to a small minority. So how did Manhattan become an exclusive island for the wealthy and what can we, as Sunshine Coast residents and thought leaders, learn from this?
The Sunshine Coast is currently going through phenomenal population growth due to an increase in opportunities triggered by investment in the area. Interstate migration is booming, especially from people in New South Wales and Victoria, as people from all over the country realise exactly what it is we have on offer – a maturing economy coupled with the ultimate lifestyle. What this is doing is driving prices up in our real estate market due to increased demand. On top of that, people are moving to the region from bigger cities and are willing to pay extra to secure their perfect home. As prices and housing undersupply continue to rise, many people are left wondering not only how they can afford to buy here, but what about their children…and their children’s children?
In Manhattan house prices soared in the 1990s…demand continued to skyrocket over the decades to a point where the cost of housing didn’t just push out lower-class families, middle-class residents can also no longer afford to live there. Career opportunities are endless in Manhattan, which can be described as the financial, entertainment, and cultural capital of the world. With little land remaining, to increase housing supply in Manhattan you would need to add more floors to existing apartment buildings, but due to the cost of construction in the area and regulations, developers are unable to do this and provide affordable housing.
Leading demographer Bernard Salt refers to the ‘Manhattan Effect’ in real estate. This is basically where lower-paid workers are forced out of communities, and then need to commute back in to service the needs of the wealthy as they can no longer afford to live there themselves.
What’s important to note, is diversity is key to a well-running economy. While here on the Sunshine Coast it’s likely we will attract large corporations as our region continues to grow, it’s just as important that the lower-skilled workers are also retained and can continue to live here. We need to learn from Manhattan and work hard to make informed decisions to avoid the same happening on the Coast. It’s these lower-skilled workers that help a great city go around. Hospitality workers, cleaners, labourers, and retail workers for example are all crucial to ensuring harmonious living for everyone, and the last thing we want is these workers moving away and potentially finding jobs elsewhere.
It’s for this reason we need to put the right plans in place now to not only increase housing supply in the region but the right type of supply. To cater to all ages and demographics we don’t just need people building single dwellings in estates, we need affordable units and townhouses for first-time buyers and downsizers. We need both owner-occupiers AND investors to help our region thrive.
As much as we love Manhattan, we don’t want to be Manhattan.
We need those who can afford to, and recognise their ability, to invest to create more rental properties for the massive need. The reward is great returns and thankful tenants and community. The ‘once in history’ circumstances continue to unfold and the opportunity for all to benefit from the future of the Sunshine Coast is now.