Sydney households will see a significant increase in water bills, with an expected rise of $168 in 2025-26. This increase comes as the Independent Pricing and Regulatory Tribunal (IPART) has responded to calls for consumers to contribute more towards funding essential infrastructure upgrades. The average annual water bill will reach $1,328 by next financial year, marking a rise of over 34 percent by 2030.
The decision to increase prices was influenced by inflation and the need for Sydney Water to enhance its infrastructure. The 13.8 percent hike for the upcoming financial year is nearly double the 6 percent increase initially suggested in IPART’s draft determination released in late May. Following this initial increase, bills are set to rise by 5.1 percent plus inflation for the subsequent four years, exceeding the original forecast of 4.6 percent.
Infrastructure Funding and Future Projections
IPART’s final determination indicates that water bills will now be 10 percent higher than previously expected based on its draft report. Sydney Water had initially proposed a far more substantial increase of 50 percent over five years, which included a staggering 20.7 percent rise in the first year. Such a proposal faced significant backlash during an ongoing cost-of-living crisis. In response, IPART suggested a more modest 23 percent increase, but critics argued that this would jeopardize the construction of essential infrastructure needed to support future housing demands.
In its final report published on Tuesday, IPART emphasized the importance of ensuring that Sydney Water’s services and infrastructure keep pace with the city’s ongoing growth. The report stated, “Sydney Water needs the capability to maintain and replace its assets, deliver necessary infrastructure to meet the increasing demands of population growth, and manage the challenges of climate change.” The pricing adjustments are expected to provide Sydney Water with $13.2 billion for capital infrastructure, an increase of $2.5 billion compared to initial projections.
Industry Reaction and Housing Concerns
The decision has drawn mixed reactions from industry leaders. Stuart Ayres, chief executive of the Urban Development Institute of Australia NSW, described the adjustments as an improvement but warned that they may hinder New South Wales’ ability to meet housing targets without additional public investment. He stated that the final report represents a compromise but raises concerns about its sufficiency for future housing projects.
Developers and experts in water infrastructure have also expressed unease regarding the assumptions made in IPART’s draft determination, which only accounted for the construction of 120,000 homes by 2029. Submissions to IPART included criticism labeling Sydney Water’s initial proposal as “too high” and “aggressive.”
As Sydney grapples with rising living costs and increasing demands on its infrastructure, the new pricing structure for water services underscores the challenges ahead in balancing consumer affordability with the need for sustainable urban development.
