Data released yesterday by the NSW Department of Planning, Industry and Environment (DPIE) shows there were only 33,000 approvals in Greater Sydney over the year to May 2020, which is the lowest number of approvals reported since September 2013. This underscores UDIA’s strong disappointment with the Government’s acceleration program and its failure to drive an uptick in approvals.
(Click image for a larger version)
All the Greater Sydney districts have experienced an annual decline in detached dwelling approvals every month since April last year. The Central and Western Cities account for 80% of the detached approvals in Greater Sydney in the year to May 2020 noting the continued importance of the North West and South West growth area for driving growth. While detached approvals were relatively robust early last year, we have seen more significant declines at the start of this year reflecting many major projects finishing and highlighting the need for more rezonings in these Western City precincts.
Total multi-unit approvals fell 26% over the year to May in Greater Sydney. The Eastern City declined by over 40% year-on-year for every month except the summer holiday period in 2020. The North District was also strongly impacted, with multi-unit approvals falling by at least 30% year-on-year for every month since July last year. Surprisingly, the South District has experienced strong year-on-year growth in multi-unit approvals since March and has overtaken the Eastern City in the number of multi-unit dwellings approved (4,106 approvals in the South District compared to 3,054 in the Eastern City).
Across Greater Sydney, dwelling approvals are now down 45% from the 2016 peak. Had approvals sustained momentum from the peak, we would be looking at an additional 57,000 dwellings already in the housing supply pipeline. Instead, dwelling completions in Greater Sydney fell 23% in the first quarter of 2020 to 34,000, well below DPIE’s Draft Housing Strategy annual target of 40,000 new dwellings for Greater Sydney. There has never been a more important time to restock the pipeline and see conjunctive action from government to rezone land, support approvals, and delivery so that we start to turn the decline around and head back towards our annual housing targets.