Sydney housing shortfall to double

1 September 2011

Sydneys housing shortfall likely to double in three years


NSWs plummeting rate of building approvals points to a doubling in Sydneys housing shortfall over the next three years, according to the Urban Taskforce. The Taskforces chief executive, Aaron Gadiel, estimated the current Sydney housing supply undersupply is 46,000 homes, up from 36,000 homes in 2009.

We estimate, at the current low levels of new housing supply, that Sydneys housing shortfall will close to double, to 80,000 homes by 2014, Mr Gadiel said.

Mr Gadiel said that NSW already produces less new housing than any other state or territory per head of population.

But the recent Australian Bureau of Statistics building approvals figures suggest that NSWs performance, relative to other states, may get even worse, he said.

NSWs private sector home approval rate is plummeting at more than three times the national rate and the value of approved new business premises is in freefall.

Weve now seen three straight months of data, where the NSW private sector home approvals have trended down by more than 4 per cent a month.

Since March, thats added up to a 12.6 per cent decline in new private sector home approvals.

Thats more than double the rate of decline suffered by Victoria in the same three months 5.6 per cent.

Its more than three times the rate of decline seen in Western Australia – 3.2 per cent.

And it contrasts with Queenslands improvement, in trend terms, over the same period by 0.7 per cent.

Between March and June, Victoria managed to approve 19,000 new homes, while NSW approved 10,000.

Mr Gadiel said that NSWs problems arent just confined to new housing.

The value of non-residential building approvals in NSW has fallen by 57 per cent since March, he said.

In the same period, Victorias has increased by 5 per cent.

Of all the states, in trend terms, NSW is suffering the sharpest decline in the approval value of new business premises.

Thats a serious sign that NSW isnt going to see the construction of new shops, workplaces and other business premises that the state desperately requires, Mr Gadiel said.

Mr Gadiel said that urgent, action by the NSW Government is required if we are to avoid serious social and economic consequences from a sustained fall in development activity.

This means urgent interim planning reforms to encourage more investment in the state delivered now, rather than in 18 months time, he said.

Mr Gadiel said the industry was seeking:

¢ appeal rights for rezoning applicants;

¢ the abolition or dramatic reform in development levies;

¢ timely decision-making enforced by a mandatory timetable;

¢ more flexibility for individual development proposals to be assessed on their own merits, rather than through rigid pre-determined local council controls;

¢ a better decision-making process – at arm’s-length from parochial politics – when a key reason for a development is to service the needs of people who aren’t currently locals; and

¢ special legislation to restore business confidence in past planning approvals.

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

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