More than six months into the National Housing Accord period, UDIA has released its first NSW Housing Accord Progress Report which shows 60% of Local Government Areas are falling behind the number of approved development applications (DAs) needed to deliver their housing targets.
The report, developed in collaboration with planning and development consultancy Mecone, measures progress against the state’s share of the Housing Accord target by tracking the number of DAs determined across the Sydney megaregion – Sydney, the Lower Hunter and the Illawarra Shoalhaven.
Data to the end of the first quarter of the Housing Accord (July – September 2024) shows of the 43 Local Government Areas of the Sydney Megaregion, 26 are tracking behind the level of development activity needed to meet their housing targets, and only very small Councils with smaller targets are performing well.
The report shows the Sydney Megaregion is already 25,000 dwelling approvals behind the number required to reach its 322,000 home target. Assuming the current approval trajectory continues and a historic attrition rate of 20% rate, we are facing a dwelling shortfall of at least 115,000 homes during the Housing Accord period.
With UDIA’s research confirming around 1 in 3 planned new homes are facing delays with enabling infrastructure or additional planning approvals, we are facing a potential scenario where the Sydney megaregion delivers around half of its new housing targets.
“NSW is tracking at least 150,000 homes behind its target, that shortfall in supply can only mean less affordable homes.”
“While it is still early days, every quarter we miss our targets makes our housing delivery challenge even harder. At this rate the Premier and Planning Minister will face a climb steeper than Mount Everest to deliver their housing targets by 2029,” said Stuart Ayres CEO, UDIA NSW.
The report provides a barometer on the uptake of the NSW Government’s recent housing reforms, particularly the upzoning around 37 train stations via the Transport Oriented Development (TOD) Program and will also track activity against the Low and Mid Rise Housing policy once these reforms are finalised.
“There were no DAs were determined for residential apartments in identified Tier 2 TOD locations during the first quarter of the Housing Accord. As development feasibility and economic conditions deteriorate, pressure on household budgets and increasing infrastructure costs are making it harder to start building new homes, and more needs to be done to improve feasibility and increase housing supply.”
UDIA encourages the Government to adopt the key recommendations in the Productivity and Equality Commission’s Review of Housing Supply Challenges and Policy Options for New South Wales, which recommended further increase of densities around the announced TOD sites, expanding them to 800m and adding more locations to the program.
“Doubling the permissible floor space ratio in the TOD 2 sites and greatly increasing density in other areas already zoned for high density apartments, will significantly increase the capacity of the industry to deliver housing,” said Stuart Ayres.
UDIA also encourages the Government to heed the Productivity Commissioner’s call to prioritise upfront investments in housing enabling infrastructure.
“With greenfield housing remaining desirable and economically feasible to build, we must prioritise infrastructure investment in in these areas. An up-front investment in enabling infrastructure will be recovered through future developer contributions and state revenue like stamp duty, land tax and payroll taxes which are only paid when homes are completed.”
“Government infrastructure investment also gives the development sector the confidence needed to progress development applications, safe in the knowledge projects won’t be left stranded without basic infrastructure like water, power and sewerage,” said Stuart Ayres.
“While the housing supply challenge is significant, UDIA and our members stand ready to work with Government to identify and resolve the blockages preventing new houses from being delivered,” said Stuart Ayres.
The full report can be found at this link https://www.udiansw.com.au/wp-content/uploads/2025/01/UDIA-NSW-Housing-Accord-Progress-Report-Q1-2024-1.pdf