NSW housing supply to suffer, thanks to todays levy back-flip

16 September 2010

The NSW Governments decision to formally exempt 96 different areas from its $20,000 development levy cap abandons struggling home buyers and renters, according to the Urban Taskforce. The Taskforces chief executive, Aaron Gadiel, said that the Planning Minister, Tony Kelly, had discarded the commonsense approach he took on the ABCs Stateline program on 18 June this year:

There’s not one council in Victoria that has a Section 94 infrastructure charge above $10,000. So NSW is unusual in that some of ours are up to $65,000 and it stopped housing development, whilst in Victoria the housing’s going ahead, Mr Kelly said.


Mr Gadiel said the very council that has been imposing the $65,000 levy, Mr Kelly complained of Pittwater Council has today been given an exemption from the levy cap.


The government was right to compare NSWs poor performance with Victoria in June.


Yesterday, the Australian Bureau of Statistics released figures showing that in the 2009/2010 financial year, work started on 52,500 new Victorian private sector homes, while in NSW work only started on 26,300 homes. [See graphs in the PDF below.]


NSW is producing half the private sector homes of Victoria despite Victorias smaller population base.


It was the state government that declared we need to get housing supply up to Victorian levels.


Yet today, the NSW government has formally allowed councils across NSW to levy many tens of thousands of dollars in levies on each new home built.


NSW is facing a severe housing undersupply and rents in key areas are increasing at more than nine times the rate of inflation.


Higher levies will not get the states housing supply moving again.


The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.


Note: Background information is in the PDF below.


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