“ABS data released today on new residential building approvals reveals yet another sobering story for the weakness in the housing supply pipeline,” said Steve Mann, CEO, UDIA NSW.
In NSW, approvals for new builds in the 12 months to February 2023 dropped below 50,000 for the first time since November 2020, marking a 20% annual decline.
Source: UDIA NSW; ABS
Most concerning in today’s figures was the story in the apartment market, with annual approvals dropping to a ten year low. At its peak in 2016, apartments comprised close to half of all approvals in NSW, now, it disappointingly sits closer to one-fifth of total approvals.
The release of these figures are especially timely given NHFIC’s State of the Nation’s Housing 2022-23 Report released earlier today. The report found that the planning pathway in NSW is far and away the most complex in Australia.
Build-to-Rent projects particularly are escaping New South Wales, with planning taking over a year to finalise in many cases, compared to 4 – 6 months in states like Victoria and Queensland.
It is not surprising, with these stats, that NHFIC’s report reaches dire conclusions about the state of affordability in NSW. More renters in NSW are paying above 30% of their income on rent, than in any other Australian state. With the apartment pipeline appearing to bottom out, there is no sign of a quick turnaround unless the new NSW Labor Government acts now.
NHFIC correctly identified the difficulty associated with obtaining presales in the apartment market. Rising interest rates, steep construction costs, and a strict tax system, which together impede the capability for developers to acquire enough presales to secure important financing for their projects.
“UDIA NSW has consistently advocated for the removal of the stamp duty for pre-sales and foreign investor surcharge, which is one barrier to the broader issues facing the apartment pipeline,” said Mr Mann.
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Media Enquiries:
Deanna Lane 0416 295 898 or dlane@udiansw.com.au