02 October 2008
Lenders are telling property developers they will not renew loans for projects with uncertain planning approvals, according to the Urban Taskforce.
NSW may lose a large number of projects currently in the pipeline if the state government and local councils cant give greater certainty, Mr Gadiel said.
Were aware of $4 billion worth of NSW projects that are the pipeline, but do not yet have the green light from government.
The best thing government can do right now is to reduce the risks facing developers by:
- quickly processing outstanding state significant approvals;
- speedily dealing with pending requests for residential and employment rezonings; and
- encouraging councils to swiftly finalise approvals for important local projects.
The government should also immediately waive development levies, as part of a rescue package for the industry.
Levies are actually driving government income down, because they are reducing development activity and depriving the government of stamp duty revenue.
Lenders are being very clear to developers right now credit is being rationed and those projects that have low levels of planning risk will have priority.
NSW has little hope of meeting employment, housing and growth targets without a strong series of projects coming through the development pipeline.
We face the prospect of losing investment and jobs crucial to the States economy in the coming years.
If these projects fall over it will leave a yawning chasm in our States job and housing numbers.
In the last six months NSW home approvals have fallen by 15.7 per cent.
In the same period, Victorian approvals fell by only 1.1 per cent.
Mr Gadiel said the decline in new home approvals was a worrying trend.
In the last financial year construction started on 31,000 new homes in NSW well below the States seven year average of 39,000 homes.
“The states home construction activity has been at record lows and well below the level of 50,000 homes a year that would be required to meet underlying community demand.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.