Investment in our future must not only rely on the infrastructure of the past says UDIA
The NSW Productivity Commissioner report released today – Building more homes where infrastructure costs less – calls on Government to leverage existing infrastructure as an economical way to support more housing.
“UDIA NSW has long called for Government to increase densities in locations that benefit from existing infrastructure capacity, including heavy rail and Metro stations, and we are encouraged that the Government is now preparing a Transit Oriented Development (TOD) policy to do just that. But this must not come at the expense of the creation of new homes in Western Sydney and the right of home buyers to choose to live in communities and housing typologies that meet their needs, dreams and aspirations,” said Steve Mann, CEO, UDIA NSW.
NSW has committed to delivering 75,600 new homes per year from 2024, under the National Housing Accord. This is more homes per year than we have ever built and comes at a time of increased uncertainty, escalating interest rates, high material costs, labour shortages and increasing builder insolvencies. In the 12 months to March 2023, there were 47,200 newly completed residential dwellings, nearly 38% below the Accord target, emphasising the size of the uptick needed. Over 50% of all new completions were detached dwellings, with just 24% being apartments, the lowest proportion of apartments as new dwellings since 2012.
At our peak in December 2018, apartments made up 43% of new supply, while detached houses still accounted for 41% of total supply. To deliver 75,600 new homes to meet the Housing Accord in NSW based on peak supply, we would need supply to total 31,300 detached houses (25% increase on current supply), 11,700 medium density dwellings (10% increase on currently supply) and 32,600 apartments (185% increase on current supply).
Unfortunately, the future pipeline does not look more promising, with only 52,200 new building approvals in New South Wales (see graph below) in the last 12 months. Despite having dropped 14% annually, detached homes continue to comprise the majority of approvals, as they have done since the boom in apartment approvals over 2016-2018.
While it is clear from the current data that Government needs to do more to support the apartment market, including leveraging existing infrastructure, and incentivising development in accessible locations.
“It remains equally important that NSW has a robust pipeline of freestanding homes and apartments, providing consumers with a choice of homes in locations which are close to family and Jobs. Many Australians still aspire to the ‘great Australian dream’ of a home on their own land and this should remain an option in NSW,” said Mr Mann.
UDIA calls on Government to support new housing, from apartments through to free standing homes, across the entire Sydney Megaregion. To do this Government must continue to invest in growth enabling infrastructure in Western Sydney, recognising that the capital investment in infrastructure pays dividends for generations to come, as the Productivity Commissioner rightly highlights.
Media Enquiries: Deanna Lane 0416 295 898 or firstname.lastname@example.org