- Benchmarking study finds that Sydney is close to joining the top seven world cities
- The city is a magnet for global firms, international students and outside investment
- But housing unaffordability and a stalled innovation economy risk future competitiveness
A new study from independent think tank the Committee for Sydney reports that Sydney is closer to joining the top-tier of global cities. The report, written by leading global cities expert, Professor Greg Clark, found that Sydney is one of the leading global cities for foreign investment, higher education, sustainability and safety.
However, it warns that Sydney’s continued success relies upon maintaining the current high level of investment in transport and digital infrastructure, addressing housing affordability and enhancing the city’s innovation economy.
The report, Sustaining The Advantage: Benchmarking Sydney’s Performance, compares Sydney against 33 other global cities, including Frankfurt, Hong Kong, London, Paris and Singapore. It finds that Sydney has established itself in a high-performing ‘second division’ of ‘Contender Cities’, a group of 10 cities that have separated themselves from the rest and possess the assets and aspirations to join the long established ‘top 7’ global centres of London, New York, Hong Kong, Singapore, Seoul, Paris and Tokyo.
It draws on a meta-analysis across 70 global indices, 35,000 data points, and more than 200,000 underlying metrics. Sydney’s progress is then reviewed across 14 indicators in comparison with the 33 peer cities.
It shows that Sydney performs strongly in:
- Financial services,
- Investment attraction,
- Higher education and
but has fallen behind in:
- R&D and innovation,
- Transport and infrastructure and
- Image, brand and influence.
Of the 10 Competitor Cities, Sydney ranks among top two in the following areas:
- Higher education appeal
- Air quality
- Visitor brand and identity
- Real estate investment transparency
- Global reputation for scenic assets and safety
However, of the 10 Competitor Cities, Sydney ranks among the bottom two in the following areas:
- Public transport coverage and efficiency
- Cost of living for expats and students
- Variety of cultural attractions and anchor infrastructure
- Technology and digital readiness for the future
- External perception of nightlife offer
Financial services are powering ahead in Sydney
The report finds that Sydney has maintained its position as the leading global financial centre in the Southern Hemisphere and its financial services offer is increasingly competitive with that of the most established world cities. Sydney is also poised to overtake Hong Kong and Singapore and become Asia-Pacific’s leading fintech hub, building off the back of the large finance and insurance sector presence in the CBD.
Sydney ranks as a top destination for investment capital from global corporates and in the top three cities for investment stability and trustworthiness. However, the report also finds that Sydney is becoming increasingly less welcoming to skilled global talent. Today, Sydney is perceived as being only the 9th most popular city in which to work globally, and has been overtaken by Los Angeles, Dubai and Amsterdam since its previous ranking of 4th.
Sydney’s quality of life remains high, but increasingly under pressure
The report finds that Sydney is still a leading global city in terms of quality of life, but that this may be diminishing by a high cost of living, particularly in relation to housing affordability, access to amenities such as restaurants and retail shops and relatively low levels of walkability.
Sydney’s employee life satisfaction has slipped, while social freedom, fairness and equity has also declined. The city’s physical health is only ranked as 36th out of 150 cities, and happiness is 17th out of 100.
Although investment is at record levels, pressure remains on Sydney’s infrastructure
The rating of current public transport continues to be an area of comparative disadvantage for Sydney, despite major investment in the city’s network. However, the report argues that this current infrastructure ‘catch up’ investment should result in steady improvements over the next 2-3 years relative to other world cities. Road congestion is an increasing concern, with the report flagging that Sydney has recently become more congested more quickly than most of its peer cities.
The quality of smart and digital infrastructure in Sydney could also be improved. Over the past year, Sydney’s technology ranking has slipped 17 places from 7th to 24th globally, due to other cities having made more substantial progress in implementing Wi-Fi hotspots and strengthening access to high-speed broadband.
Sydney’s brand remains strong, but more could be done to promote it
Sydney remains one of the most well regarded and admired cities in the public eye. Sydney ranks 1st as the most reputable city in the world and it is the only city except for Copenhagen to boast an “excellent reputation” due to its natural beauty, wide range of experiences offered, and robust overseas appeal to prospective residents.
However, despite this high regard for Sydney’s life-style and natural beauty, Sydney has also faltered slightly in some of the more all-round measures of brand, image and influence. Measures of the city’s online promotional efforts and visibility, its soft power, political influence, reputational power, and global reach all see Sydney perform in the middle of the pack.
Other key facts from the report:
- Sydney is now among the 75 largest cities in the world by population.
- Sydney’s total economic output places it among the 50 largest urban economies.
- Sydney is among the 10 fastest growing in terms of jobs and population, growing faster than other contender cities such as Toronto, Madrid, Amsterdam and Washington D.C.
- Sydney is ranked 3rd overall for global stability and trustworthiness for investors.
- Living and working in Sydney remains expensive even relative to other high-performing global contenders.
- Housing costs outstripping wage growth is a key factor. Deutsche Bank now ranks Sydney 28th out of 47 cities for property prices to income ratios.
- Sydney has the highest amount of green space per inhabitant in comparison to the peer cities.
Michael Rose, Executive Chairman of the Committee for Sydney said:
“Our report demonstrates that there is both continued momentum towards Sydney being a serious candidate to achieve ‘top table’ status as a global city but also that on some key indicators Sydney has serious challenges.”
“The knock-on impacts of the city growing at such a fast pace are strains upon our overall quality of life as well as public infrastructure. While the city’s infrastructure is improving and receiving significant new investment, it is still a drag on its absolute and comparative performance. In addition, Sydney’s affordability challenge puts our burgeoning and booming innovation economy under significant pressure”
“A key solution of managing these pressures will to deliver the Greater Sydney Commission’s plan for Greater Sydney, which will deliver sustainable growth across the city and ensure that economic growth and liveability go hand in hand”.
Matthew Beggs, Acting CEO, Landcom said:
“Housing affordability and housing supply is a serious issue for Sydney, which needs at least 725,000 new homes to accommodate an additional 1.7 million people by 2036,” Mr Beggs said.
“The NSW Government has given Landcom the task of improving the supply, diversity and affordability of new housing in Sydney and NSW, underpinned by industry-leading sustainability principles.
“This report is an insightful tool that highlights Sydney’s strengths and weaknesses as an international city, and it will help Landcom, governments and key stakeholders plan for future growth and address the challenges that this presents.”
Darren Steinberg, Dexus CEO said:
“For Sydney to remain a top 10 global investment destination it needs 24-hour access to its international airport and should consider extending the operational hours of Sydney Airport. Sydney also needs to ensure it has a vibrant CBD precinct with support at all levels for restaurants, entertainment and the arts in order to maintain liveability and competitiveness.”
Notes for Editors:
- The Committee for Sydney is an independent think tank and champion for the whole of Sydney, providing thought leadership beyond the electoral cycle. The Committee aims to enhance the economic, social, cultural and environmental conditions that make Sydney a competitive, resilient and liveable global city. The Committee has a diverse membership with over 150 member organisations: including the major corporate sectors driving Sydney’s economy; strategically minded local authorities; key NSW Government departments and agencies; not- for-profit organisations; and leading arts and sporting institutions. Members help develop and deliver priorities, provide expertise and ensure a representative geographical spread across the greater Sydney region.
- The report benchmarked Sydney against the following global cities: Amsterdam; Barcelona; Berlin; Boston; Brisbane; Brussels; Buenos Aires; Chicago; Frankfurt; Hamburg; Hong Kong; London; Madrid; Melbourne; Miami; Milan; Montreal; Munich; Osaka; Paris; San Francisco; Seattle; Seoul; Singapore; Stockholm; Tel Aviv; Toronto; Vancouver; Vienna; Washington D.C.; Warsaw; Zurich.