Today’s ABS commencement and completions data are a cause of concern for NSW’s capacity to deliver on the National Housing Accord targets.
“With less than 9 months to go to the July 2024 Accord start date, all tiers of government and all parts of industry, need to be working at full throttle towards the ambitious national target of 1.2 million new homes delivered in 5 years,” said Steve Mann, CEO, UDIA NSW.
The steep uphill trajectory needed to increase housing supply is one we have never seen before in our state. The ABS data released today shows that NSW completed just 48,700 new homes in the 2022-23 Financial Year –the second lowest number of completions for a financial year in NSW over the last 8 years.
Source: UDIA NSW; ABS
Today’s data show the scale of the ongoing challenge in NSW as we remain 36% below the 75,600 completed homes needed each year, being our fair share of the National Housing Accord. This level has never been achieved in our state and has never been sustained for five years straight.
The task gets more challenging with completions for Detached Houses recording a 1% decline annually, representing a 22% decline from their peak. At the other end of the market, rolling annual Apartment completions have hit their lowest rolling annual performance since June 2014, dipping to below 10,600.
UDIA NSW modelling in the graph below shows just how far each typology has fallen below peak completions in 2018 and the enormous uplift needed to meet our Accord targets. Medium density typologies are the one positive story, currently outperforming their projected targets by 7%.
Source: UDIA NSW; ABS
“The NSW Government cannot afford to pick winners and losers and must not choose between our future housing going ‘up or out’. We must do both,” Mr Mann said.
“In a housing crisis of this magnitude and with targets more ambitious than we have ever achieved, we must be looking to incentivise all housing typologies and tenures in accessible locations across the entirety of the state.”
It is clear that without significant government intervention and close collaboration with the development industry, financiers and constructors, the targets under the National Housing Accord will be a challenge to realise. UDIA has made a number of recommendations to the NSW Government to set a course to deliver the Accord targets, including:
- Allowing greater flexibility through zoning, promoting mixed-use precincts by removing the GCC ‘Retain and Manage Policy’, which sterilises growth in employment lands. Allowing liveable and vibrant place outcomes which include both housing and jobs that increases productivity outcomes and the availability of homes.
- Create a secondary pathway for projects submitted under the State Assessed Planning Proposal (SAPP) but which were not progressed. By fast tracking these projects we can deliver thousands of new homes right across Sydney and the Regions.
- Work with the development industry and the Community Housing sector to get the Affordable Housing bonus policy settings right and to ensure the policy delivers on the NSW Government’s objective to increase the supply of affordable rental housing and market housing in NSW.
- Seek to increase housing in accessible locations near transport nodes and leverage the investment made in existing and future transport infrastructure, including heavy rail and Metro, to create great places which benefit existing and future residents alike.