NSW Planning System has a need… the need for speed to close the gap to housing demand

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NSW Planning System has a need… the need for speed to close the gap to housing demand

For a state with seemingly everything going for it, when you look closely at NSW there is another story.

We are facing a deep housing supply and affordability crisis. The question is… how did we arrive at this situation?  Some of the answers can be found in research commissioned by both NSW Treasury and the National Housing Finance & Investment Corporation (NHFIC).
Here is what was revealed:

  • NSW has the worst planning system in Australia and the slowest planning approvals.
  • NSW has the most expensive charges for the development of greenfield housing.
  • The proposed infrastructure contributions levels are too high and would put a significant constraint on supply in NSW in the years ahead.
  • Over a long period, (see graph below) NSW has failed to build enough homes for the growing population, resulting in higher prices.

  • It now has the least affordable homes in Australia and some of the least affordable in the world.
  • The 2021-22 NSW Intergenerational Report estimated that we need 42,000 homes per year out to 2060 just to meet the predicted demand year on year. Given that we have not sustainably reached this level of construction in over twenty years… this would arguably be significant ask.
  • UDIA research into funds being collected by Councils from section 7.11 and 7.12 contributions revealed that at the end of FY20, $3bn was held in the Sydney Megaregion… now we expect it is closer to $3.5bn.

UDIA NSW is the leading advocate for residential development in NSW and in our submission for the NSW Budget we have made a number of recommendations which will make a significant contribution to helping the housing industry deliver the 42,000 homes a year we need.

“Providing development ready land requires a marked uplift in the funding and timely provision of enabling infrastructure by both the NSW Government and Councils, fixing the biodiversity offsets market and a step-change in government co-ordination of land use and infrastructure.” said Steve Mann, CEO, UDIA NSW.

Within our submission for the NSW Budget, we have identified three specific areas of focus:

  • Provide a sustainable level of development ready land to support greenfield housing supply.
  • Remove the barriers to the supply of apartments.
  • Reduce the costs and red tape that the NSW Government imposes on development that is slowing housing supply and discouraging investment.

“The crisis in housing affordability can be resolved if we speed up the planning system to enable a lot more homes to be built for people in the next few years. The NSW Government has recognised the problem and decisions need to be made now, to unlock the housing development pipeline.

The planning system is stuck in first gear – it needs to get into the fastlane.” Mr. Mann added.

The UDIA NSW full Pre Budget submission can be found at this link.


For more information please contact Deanna Lane, Media & Communications Manager UDIA NSW
on 0416 295 898 or dlane@udiansw.com.au