NSW Government estimates indicate that the number of new homes to be built in Greater Sydney in the next five years is currently at 128,450, well under the required targets given the current housing crisis.
The new findings have seen over 20,000 homes erased from the initial 151,000 projection in previous forecasts by NSW Planning. It is hoped that the new legislation currently before State Parliament will assist with increasing the totals.
Studies show that when excluding the likes of Wollondilly, Hawkesbury and Blue Mountains LGAs, that the housing forecast sits below 25,000 new homes year on year, some 25 percent lower than preceding years. Councils such as Blacktown, Hills Shire and Liverpool have been earmarked for significant development in the next decade, with 18,000, 14,000 and 11,000 homes to be constructed in each LGA respectively.
The decline in projected numbers is attributed to the pandemic, a damaged supply chain and land banking by developers. The Planning Department is optimistic that projections will increase in due course, from 20,250 new homes this financial year to 29,500 in 2026, based on a medium growth scenario, which could easily change depending on the economy and legislation at state and federal level.
The state government’s plan to incentivise affordable housing for developers has been announced, but not yet approved. For projects over $75 million, developers will be given an additional 30 percent in height and floorspace, providing 15 percent of the development is allocated as affordable housing.
The proposed incentives have been met with opposition by local councils, given that developers will be able to skip through the typical DA process on projects that qualify for the scheme and go straight to the Independent Planning Commission, without any community consultation.
“The size of the housing task confronting the state means that we have to make changes as quickly as possible so that they have a positive impact on housing supply,” Planning Minister Paul Scully says in an interview with the Sydney Morning Herald.
NSW Premier Chris Minns believes that any upcoming review of housing targets will likely see houses originally planned in the west to be relocated and delivered in the east. He believes the issue with a lack of development is to do with the fact that targets are not being met in terms of occupancy, meaning developers are becoming hesitant due to a perceived lack of demand.
“The targets have always been in line with projected immigration rates. The targets haven’t been the problem – it’s been councils not being able to turn those targets into actual dwellings.”
