‘Enclaves for the rich’: new luxury housing is putting parts of Sydney out of reach to all but the very few

A wave of redevelopment in Bondi, the inner city and lower north shore is pricing people out – even while governments profess to be focused on affordability

Bondi used to be home to surfers, backpackers and artists. But the bohemian vibe of Sydney’s most famous beach risks being swamped by a wave of high-end developments.

Older apartment blocks that provided affordable housing are being bought by companies and wealthy individuals, who are turning them into smaller blocks with fewer luxury dwellings, or sometimes single homes.

Several recent developments are part of a trend that has turned desirable streets into construction zones.

In Hastings Parade in North Bondi, one recent development application resulted in 10 units being turned into a single house.

On Campbell Parade in Bondi Beach, an art deco block of 16 units at the southern end of the beach has been gutted and is being turned into seven luxury apartments, to be known as the Mayfair. The top floor apartment is marketed at $22m to $24m.

Opposite North Bondi surf club, another art deco building on Campbell Parade currently housing a creperie and eight small units with million-dollar views, will make way for two luxury townhouses.

Nearby, on Hewlett Street in Bronte, 22 units from the 1960s have been demolished for nine luxury townhouses with an expected price tag of more than $20m each.

“It makes a mockery of our housing crisis,” says Paula Masselos, the former Labor mayor of Waverley council, which takes in Bondi beach.

“Our affordable housing stock is being cannibalised for expensive housing and it’s becoming a playground for the rich. The super wealthy will be the only people who can live here. It’s really depressing.”

Others beg to differ. David Malouf, of Highland Property, which is marketing the Mayfair, says it’s a good thing.

“The value is there in Bondi. It’s one of the most iconic beaches in the world. Let’s take advantage of it,” he says.

As Sydney grapples with a housing crisis that has already priced many young people out of the market, this latest phenomenon raises serious questions. What sort of city do we want in the future?

Should the eastern suburbs, the inner city, the lower north shore, and other areas once celebrated for their diversity, such as Kings Cross, be redeveloped into luxury housing? Isn’t the government trying to increase density and affordability?

What happens to communities if key workers, older people, artists and surfers are forced out?

‘Bondi is Bondi because of its diversity’

The City of Sydney has attempted to combat the trend of older blocks of flats being turned into luxury housing with a policy that prevents developers from reducing the number of dwellings by more than 15%.

Between 2018 and 2024, there were 25 development applications (DAs) in the City of Sydney council areas, which resulted in the loss of 65 dwellings, a spokesperson says.

These included the redevelopment of 13-17 Ithaca Road in Elizabeth Bay, which reduced the number of units from 32 to nine, and the conversion of a seven-unit building on St Neot Avenue in Potts Point into a single house.

The council’s attempt to block one high-profile luxury development – the demolition of the Chimes building in Potts Point and the replacement of 80 studio and one-bedroom units with 34 luxury apartments – was stymied by the state government.

The NSW Labor government intervened to declare the council’s policy could only apply to applications lodged after it came into force.

That meant the controversial Chimes development, backed by one of Australia’s richest businessmen, James Packer, couldn’t be stopped because the DA was lodged before the policy came into effect.

“Sydney should not simply become an enclave for the rich. We need more housing, not less,” the City of Sydney lord mayor, Clover Moore, said.

“While housing is the responsibility of the NSW government, the City of Sydney is committed to tackling the housing crisis, and we pull every lever we can to address the issue in our local area.”

Waverley council looked at a similar dwelling reduction rule in 2024.

When its policy limiting the reduction to 15% went on public exhibition it drew 10 submissions in favour and three against.

One submission stated: “This is an excellent amendment. It is distressing to see multiple tenants turfed out of their apartments so they can be converted to a single dwelling for the very wealthy.”

Another said: “Bondi is Bondi because it has diversity of people. This gives us vibrancy and so many restaurants, shops and facilities to access.”

However, when the Liberal mayor, Will Nemesh, who also works as public affairs spokesperson for developer Fivex Commercial Property, took over the reins after the council elections, the policy was dropped.

“The proposal was abandoned because it was poor planning policy that would not have achieved its goal of delivering more affordable housing for the Waverley community,” Nemesh says.

A Waverley council spokesperson said the council “recognises the importance of affordable housing availability and this year made their largest acquisition of affordable housing stock in close to 20 years”.

“The Bondi Junction masterplan, which is a strategic roadmap for Bondi Junction, aims to boost housing supply through providing a mix of dwellings to attract a diverse community.”

The NSW planning minister, Paul Scully, says the state government “has actively supported councils developing their own ‘no net dwelling loss’ policies and will continue to support any council that is designing a similar policy”.

Apartments left empty by investors

On the other side of Sydney Harbour, the same trend can be seen in Neutral Bay and North Sydney.

Two interwar blocks of flats at Kurraba Point containing 47 small, relatively affordable units, were snapped up by developer Thirdi Group, which has now developed 24 luxury apartments. The penthouse is on the market with a guide of $40m.

“The pocket park opposite used to be filled with children. The kids used to walk to school and mothers used to gather with their prams,” the North Sydney mayor, Zoe Baker says. “That’s all gone.”

Baker says a number of new apartments are left empty by investors and overseas buyers. Comment was sought from Thirdi.

However, when the Liberal mayor, Will Nemesh, who also works as public affairs spokesperson for developer Fivex Commercial Property, took over the reins after the council elections, the policy was dropped.

“The proposal was abandoned because it was poor planning policy that would not have achieved its goal of delivering more affordable housing for the Waverley community,” Nemesh says.

A Waverley council spokesperson said the council “recognises the importance of affordable housing availability and this year made their largest acquisition of affordable housing stock in close to 20 years”.

“The Bondi Junction masterplan, which is a strategic roadmap for Bondi Junction, aims to boost housing supply through providing a mix of dwellings to attract a diverse community.”

The NSW planning minister, Paul Scully, says the state government “has actively supported councils developing their own ‘no net dwelling loss’ policies and will continue to support any council that is designing a similar policy”.

Apartments left empty by investors

On the other side of Sydney Harbour, the same trend can be seen in Neutral Bay and North Sydney.

Two interwar blocks of flats at Kurraba Point containing 47 small, relatively affordable units, were snapped up by developer Thirdi Group, which has now developed 24 luxury apartments. The penthouse is on the market with a guide of $40m.

“The pocket park opposite used to be filled with children. The kids used to walk to school and mothers used to gather with their prams,” the North Sydney mayor, Zoe Baker says. “That’s all gone.”

Baker says a number of new apartments are left empty by investors and overseas buyers. Comment was sought from Thirdi.