Media Release – NSW Housing Forecast figures are good news – but is this just wishful thinking?

The Urban Taskforce CEO, Tom Forrest today welcomed the NSW Government’s publication of housing forecasts for the Sydney Metropolitan area showing that 191,050 new homes are forecast for completion over the next five years.  See data on the DPIE website.

“This new five-year housing completions forecast figure of 191,050 for the Sydney Metropolitan area represents an increase from the 176,485 completed homes over the past five years.  But therein lies the problem.  We have had a boom in housing supply up until the brakes went on just prior to the NSW election.  Now approvals have fallen off a cliff.

“Over the past decade, NSW has only twice reached the housing completions minimum target that the Greater Sydney Commission mandated as necessary to meet demand created by population growth (36,250 new households per year as stated on p47, GSC Greater Sydney Regional Plan).

“The consistent under delivery in housing completions across metropolitan Sydney has created massive pent-up demand for new homes (detached houses and apartments) and has this has pushed up housing prices, particularly for first home buyers.

“The Urban Taskforce calls on the NSW Government to follow through on the Premier Berejiklian’s commitment to implement major reforms to the constipated NSW Planning System.

“This reform agenda should start with mandating minimum housing completion numbers (set hard targets) for each LGA. Where they are not being met, DPIE must take immediate control to ensure that targets are realised.  Anything less consigns new buyers to even further price increases.

“The GSC’s minimum housing completions number does not take into account the backlog created by the planning system’s failure to achieve sufficient housing supply over the past decade.  A target of at least 40,000 new homes per year will be needed if any downward pressure on housing prices is to the achieved.

“The Urban Taskforce is very concerned that the NSW Government has avoided publishing Council by Council new housing targets.  Today’s new DPIE forecast could be seen as wishful thinking without any “stick” to ensure that Councils comply.  The figures show that new housing approvals over the past 12 months were only 34,765.

“Typically, only two thirds of approvals result a completed home. This is because land often requires service infrastructure or consolidation of land parcels. Further, a lack of demand for housing in certain areas can result in poor development feasibility. Thus it is reasonable to anticipate a sharp drop-off in housing supply.

“In light of the upcoming Council elections, it appears that the NSW Government is deliberately avoiding setting hard housing supply targets for each LGA.  The big problem with this is the deadline for the completion of new Local Environment Plans (LEPs) in the fast-tracked LGA is June 2020.  You can not complete a sensible LEP without housing targets.

“Any public exhibition of a LEP is meaningless unless it details how the proposed zonings can deliver on housing targets.  The GSC and DPIE have shown no interest in holding Councils to account to date.

All the above can be attributed to Tom Forrest, CEO, Urban Taskforce

Table prepared by Urban Taskforce from DPIE data – Click DPIE website.

* This figure is rounded down to zero%.

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