08 September 2009
A blanket extension to existing and impending development approvals will be crucial to an economic recovery in NSW, according to the Urban Taskforce.
When credit is available, the terms are so prohibitive that very few projects are viable, Mr Gadiel said.
Mr Gadiel said that developers are now starting to run up against the existing provisions of the states planning law which causes a development consent to lapse, after five years, when it is not acted upon.
In some cases local councils have required project commencement within three years of issuing a consent, he said.
Councils dont have the discretion to extend the life of an existing development approval beyond the mandated five years.
When a development consent lapses, it generally results in an immediate devaluation of the property concerned.
This will, in turn, weaken the financial position of the developer and further reduce the chances of the development proceeding.
If we are going to build our way out of this economic slowdown then action is urgently needed to safeguard the position of projects queued up, ready-to-go when credit conditions return to normal.
Mr Gadiel said that government needed to move urgently and enact special legislation automatically extending the life of all development consents by two years.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
The construction activity made possible by property developers contributes $69 billion to the national economy each year and creates 709,000 direct jobs. The construction industry is Australias third largest source of employment.
