CEO’s Message – 31.07.2020

NSW Government needs to act now

It has been a big week for property development with the recent announcements on first home buyer stamp duty concession increasing and the 50% discount on land tax for Build-to-Rent (BtR) developments. There is a lot more to be done to stimulate growth in the BtR market and I will leave that for today and encourage you to attend our Build to Rent focused episode of UDIA TV on 13th August which includes the UDIA Roy Sheargold scholarship project, which provides a financial feasibility study of the Build to Rent sector in Sydney.

NSW Government has recognised that our sector is essential, but the measures that have been announced are measures that we needed pre-COVID-19. They are not enough to drive the housing led recovery we all want to see beyond COVID-19 in NSW.

With dwelling approvals still declining, in a years’ time, there will be so few projects ready to commence that we will not be able to bring jobs to the table. Just today, ABS released their monthly dwelling approval data, showing that, in seasonally adjusted terms, approvals for private sector houses in NSW fell 14.8 per cent in June. We are deeply concerned.

Treasurer Perrottet recently reported that from March to May this year, over 260,000 fewer people are employed in NSW. Conditions from eased COVID restrictions in June clawed back an additional 80,000 jobs in NSW, but even the most optimistic of us aren’t prepared to dismiss the possibility of a second wave as we have seen in Victoria.

We are grateful to see the extension of JobKeeper stimulus, albeit based on reducing support, until March 2021. This extension gives us time to plan, and it gives NSW Government time to step up and bring meaningful stimulus to the table for our sector. The development industry currently employs 25% of the State, the largest employer by industry.

This is why we are calling for more stimulus. It is imperative on the NSW Government to keep the development & construction sector delivering for the economy. UDIA NSW is calling for more stimulus across a broad range of homebuyer profiles, not just First Home Buyers (FHB), a segment which currently sits at approximately a quarter of the market.

Our research shows that previous stimulus packages, geared only to First Home Buyers, has doubled the purchasers from this cohort, but there this is not enough to drive stimulus across new home buyer market.

UDIA NSW has been advocating for State-based stimulus package, including stamp duty concessions, through our COVID-19 recovery road map, Project Bounce Back. UDIA NSW’s COVID-19 recovery recommendations also included an extension of stamp duty relief to all homebuyers for new builds for at least 24 months.

We will be continuing our advocacy to increase the stimulus measures from State government.

Regional Developers Update | Illawarra and Shoalhaven

In this edition: 

  • Stamp Duty Exemption Changes
  • Wollongong Affordable Housing Options Paper
  • Council Support for Boarding Houses
  • Shoalhaven LSPS

Stamp Duty Exemption Changes

The NSW Government has extended the limit for stamp duty exemptions for first homebuyers from $650,000 to $800,000. UDIA is supportive of this initiatives but would like to see it extended to all homebuyers, not just first homebuyers who make up 27% of the market. For the Illawarra, the change is very welcome because the average new house price is currently around $675,000. This means that many homes previously just above the limit are now eligible for the stamp duty exemption. UDIA estimates up to 500 new homes in the Illawarra could benefit from the change.

Wollongong Housing & Affordable Housing Options Paper

UDIA made a submission to the Wollongong Housing and Affordable Housing Options Paper. We highlighted two main issues with the delivery of affordable housing in Wollongong. The first is that the introduction of an affordable housing contributions scheme must be accompanied by commensurate incentives to offset the additional tax on development. The second is a list of tweaks to development controls for multi-dwelling housing that could significantly increase the uptake of medium density zonings (currently only 20% of medium density zoned land has medium density development on it in Wollongong). Read the submission here.

Council support for Boarding Houses

UDIA was pleased to see Shoalhaven City Council’s recent article highlighting the potential role of well-designed new generation boarding houses in giving people more choice of housing. Read the article here.

Shoalhaven LSPS

The Shoalhaven Local Strategic Planning Statement is off exhibition on Friday 31 July. UDIA’s submission noted the need to boost housing approvals and accelerate infrastructure delivery in the greenfield release areas. We also raised concerns with the blanket statements regarding not allowing rezoning of rural or industrial land and encouraged council to adopt a merit-based approach to each proposal. Read the submission here.

UDIA NSW launches new interactive data dashboard

UDIA NSW has put together an interactive dashboard to allow members to dive deeper into approvals data for the last 3 years. The dashboard visualises the number and building type breakdown of approvals for all LGAs in New South Wales and allows you to select a custom time span between mid-2017 and now. This is the first taste of new research dashboards that UDIA will be rolling out to members over the coming months.

Of particular note is the performance of Blacktown City Council, which has approved the most dwellings (18,853) of any LGA in the state over the last 3 years. Blacktown is followed by Parramatta and Liverpool, which approved 14,510 and 11,961 dwellings respectively, showing the importance of the Central City to the future of Greater Sydney.

UDIA NSW welcomes new appointments for WPCA and GSC

Friday 24 July 2020 (Sydney, Australia) – UDIA NSW CEO Steve Mann congratulates Jane Fitzgerald on her appointment as interim chief executive of the Greater Sydney Commission (GSC).

“UDIA NSW welcomes the appointment of former Property Council’s NSW Executive Director Jane Fitzgerald. Jane Fitzgerald has an extensive history in collaboration across government and industry and we look forward to working with her in her new role.”

Mr Mann also extends his congratulations to Dr Sarah Hill for her appointment to the newly formed Western Parkland City Authority (WPCA), an expansion of the Western City Aerotropolis Authority (WCAA).

“Dr Sarah Hill now has the opportunity to execute the polycentric city vision for Sydney which she helped devise while at Greater Sydney Commission. The delivery of the Western Parkland City, as a world-class, 30-minute city will be crucial to the economic development of the West.”

UDIA NSW will be continuing advocacy for the Western Parkland City Authority to progress:

  • rezoning of the Aerotropolis with a clear infrastructure plan in line with UDIA NSW’s Aerotropolis Delivery Program;
  • a reinstated Urban Development Program (UDP) for Greater Sydney to provide a clear line of sight for forward development and infrastructure coordination across Western Sydney. UDIA’s UDP South West Stage 2 Pilot will bring together, the future development pipeline, monitoring housing supply targets and coordinating and prioritising the delivery of the supporting infrastructure needed to deliver growth;
  • an extension of the commitment to North-South rail – connecting from St Marys to Tallawong to create the ‘iron spine’ of TOD centres and the Southern Extension to Greater Macarthur. This will connect the West with the West and improve equity outcomes in Western Sydney;
  • achieving consensus and action on the future of water in Western Sydney, including recycled water, flooding and the blue-green grid vision for South Creek and the Parkland City.

And advocating for Greater Sydney Commission to enable:

  • the need for ongoing response to COVID-19 with a double dividend delivery of jobs for enabling infrastructure that will lead to shovel-ready housing;
  • a focus on job creation and furthering the economic development of Parramatta as the Central River City;
  • the transformation of remnant industrial land into vibrant mixed-use urban centres;
  • the creation of city-shaping transport infrastructure in line with the delivery of a polycentric city;
  • better collaboration between State and Local Governments and industry with the goal of identifying and delivering new economic development;
  • clear and transparent housing targets which create housing supply close to new employment centres in the West.

“The next stage of the Aerotropolis will be a defining moment in the history of Greater Sydney in delivering the Metropolis of Three Cities regional plan for Sydney integrated with the 2056 NSW Transport Regional Plan. The vision for the Western Parkland City must be delivered to create a city that will raise the bar on global city-making.”

“There is a long and difficult road ahead to ensure that the right infrastructure is in place at the right time. Let’s not forget that the vision for Western Sydney is to deliver the infrastructure and services to build a third city which is liveable, affordable and well connected.”

ENDS –


Media contact: Mia Kwok 0435 361 697 media@udiansw.com.au

 

24.07.2020 GSC and WPCA leadership changes welcomed by UDIA NSW

CEO’s Message – 23.07.2020

Today, the Federal Government released the Economic and Fiscal Update. This document provides us with a better understanding of the impacts of COVID-19 and the economic outlook, albeit through a murky lens.

The update shows that the Federal Government have done a commendable job in their recovery efforts for the national economy and in providing for the health and safety of Australians, however much more will need to be done. The Federal HomeBuilder scheme has had little impact in NSW with fewer than 1000 greenfield lots available and eligible in Greater Sydney and very limited application even in the Hunter, Central Coast and Illawarra regions.

The uncertainty around the future of the property industry has made developers increasingly concerned about the economic outlook. UDIA NSW want to see State Government stepping up to the plate to provide our industry with real support and stimulus for the residential development sector.

To date, the State government has been focused on the short-term COVID fixes and enabling measures for planning. However, there has been no sustained economic stimulus for the residential sector throughout COVID-19. Only five residential projects have arisen from the NSW Government’s accelerated planning system, out of 48 total fast-tracked major projects over four tranches.

The latest DPIE data shows that we are at the lowest levels since September 2013. There were only 33,000 approvals in Greater Sydney over the year to May 2020. The apartments sector is at serious risk in Greater Sydney. Apartment approvals have dropped 64% since the peak in September 2016, four years ago. This points to the challenges facing the apartment sector, which needs further support.

UDIA NSW will be continuing advocacy for a stimulus package that will provide a housing-led economic bounce back. Our industry employs a quarter of the State, with every new home creating at least 9 new jobs. We are optimistic that the newly formed Planning Delivery Unit will be able to further their efforts to restocking the dwelling supply pipeline in Greater Sydney and our regional cities. As an industry deemed essential to the economy we don’t want to see another short-term “sugar hit”, instead we are calling for a full commitment to our industry to power sustained economic recovery in NSW.

 

The key stats and figures from the Federal Economic and Fiscal Update are:

  • The economic support package for workers, households and businesses is estimated at $289 billion or the equivalent of 14.6% of GDP.
  • The underlying cash balance is forecast to decrease from balance in 2018-19 to a $85.8 billion deficit in 2019-20 and a $184.5 billion deficit in 2020-21.
  • Debt levels have increased significantly as a result of the COVID-19 pandemic, however Australia continues to have a low level of debt-to-GDP compared to other countries. Net debt is expected to be $488.2 billion (24.6% of GDP) at 30 June 2020 and increase to $677.1 billion (35.7% of GDP) at 30 June 2021.
  • On a calendar-year basis, real GDP is predicted to grow by 2.5% in 2021, after a fall of 3.75% in 2020.
  • As a result of the pandemic around 709,000 jobs were lost across the country in the June quarter.
  • The unemployment rate is forecast to peak at around 9.25 % in the December quarter although labour market conditions are expected to strengthen beyond 2020.

TfNSW (RMS) Hunter Update

UDIA’s ongoing advocacy on RMS issues has resulted in the recent formation of a coalition reference group including the Hunter JO and Property Council, endorsed by the Minister for Regional Transport and Roads and supported by DPIE. We are meeting biweekly with senior TfNSW officials from the Sydney office. Our focus is two-fold:

 

  • Triage current projects that are delayed by RMS

 

  • Lasting process improvements at RMS to create a customer-based culture focused on delivering the housing and employment goals of the Regional Plans

 

We are expecting to establish a working group to focus on the Works Authorisation Deed (WAD) process, and a change in policy on bank guarantee requirements.

 

Please contact Elizabeth York to share your experience, questions or comments.

Hunter – HomeBuilder update

Both the Federal and State Governments have identified the development industry as the key engine to drive an economic recovery out of COVID-19.  The industry employs a quarter of NSW, with every new home creating at least 9 new jobs. The Federal HomeBuilder program is a recognition of the importance of our sector. While its take-up has been strong nationally, UDIA is raising serious concerns that HomeBuilder will not bring forward enough greenfield lot sales to make an impact in NSW due to timing issues and eligibility criteria.

UDIA is raising concerns that the HomeBuilder program has been designed with tight eligibility criteria that limit its uptake.

UDIA has been in further discussion with Revenue NSW to determine how this scheme can be applied most fairly in our State. Revenue NSW has been generous with its timetable with regard to delays in construction commencement.

The scheme allows a maximum extension of an additional three months where Revenue NSW is satisfied that the delay in commencement of construction is due to unforeseen factors outside the control of the parties to the contract (e.g. extreme weather or building or planning approvals).

There are serious concerns that HomeBuilder will not bring forward enough greenfield lot sales even with an extension due to delayed construction start times. UDIA has surveyed our members and determined that a further three-month time extension on commencement until 30 June 2021 would result in an additional 755 greenfield lots – particularly in the Hunter, Central Coast and Illawarra regions.

Potential additional greenfield lots to be unlocked by Policy Changes: UDIA NSW Survey

If Revenue NSW extends construction timeline by 3 months

If the time for contracts to be signed was extended until 31 March, then a further 560 new greenfield lots could be unlocked, and a further 1155 greenfield lots if construction commencement were extended to commence by 30 September.

 

If Federal Government extends contract signing date by 3 months

UDIA continues to advocate for an extension of HomeBuilder so that our local economies can fully benefit.

Accelerated Assessment Program misses the regions

The NSW Planning System Acceleration Program is welcomed as a means to hasten the assessment of major projects and planning proposals; unfortunately, the criteria of the program constrain the number of eligible projects and only 5 residential projects have been included across the state. The low number of regional projects is particularly disappointing. Of the 80 projects in the 4 tranches released so far, only 5 of those were in the Hunter and 3 in Central Coast. UDIA is advocating for the inclusion of more regional and residential projects in the Program.

 

Which Hunter and Central Coast projects have been included in the Planning System Acceleration Program so far?

 

  Tranche 1 Tranche 2 Tranche 3 Tranche 4 Totals
All Residential
NSW 24 24 19 13 80

5

Hunter 1

 

UoN Honeysuckle Campus

1

 

Honeysuckle – Horizon Lee 5

3

 

Bulga coal project

 

Brandy Hill quarry expansion project

 

Cockle Creek (Lake Macquarie) planning proposal (residential and commercial)

 

0 5 2
Central Coast 1

 

Warnervale Public School

0 2

 

Mannering and Chain Valley coal project

 

Affordable housing at 56 Beane St Gosford

0 3 1

 

A central mailbox at DPIE has been set up to receive ongoing issues and additional project proposals for fast track consideration.

 

The criteria for project consideration are:

  • Jobs – does the project create jobs during construction and ongoing?
  • Timing

– can a decision on the project be made quickly?

– for DAs, can the project commence within six months?

– for planning proposals, can the project proceed to DA within six months?

  • Public benefit – can the project deliver or support public benefits (e.g affordable housing or new public space and parklands)?

 

Council Accelerated Assessment Program

DPIE is now offering to work with councils to adapt the Planning System Acceleration Program to proposals in individual LGAs. UDIA understands that most of the councils in the regions have expressed interest in engaging with DPIE in this area. UDIA has raised concern that councils may lack the resources to effectively implement an acceleration program without undermining existing work or disadvantaging projects that might fall outside the acceleration criteria. We welcome DPIE’s acknowledgment that councils need additional support.

UDIA Hunter and Central Coast Biodiversity Working Group

The UDIA Hunter and Central Coast Biodiversity Working Group is being established to update our strategy to consider biodiversity issues for development. Alan McKelvey (Hunter Vice Chair) will lead the Working Group.

Noting:

  • inconsistency on implementation of the Biodiversity Conservation Act
  • unpredictability of offset pricing
  • compounding offset requirements across federal, state and local authorities

We will develop a strategy to:

  • bring more balance, transparency and consistency to conservation efforts
  • engage and collaborate with related stakeholders

Please contact Elizabeth York with any comments or questions.

Hunter UDP Update 23 July

UDIA participated in the latest meeting of the Hunter UDP Committee on 14 July, where items were considered for potential funding through the State Voluntary Planning Agreement (SVPA) Funding Program. Currently $15 million remains available from Hunter contributions.

DPIE is currently seeking formal project nominations from public authorities including councils and agencies. Industry input was considered at the Hunter UDP Committee meeting. UDIA members nominated projects and UDIA proposed each without prioritisation to the UDP Committee and an officer from DPIE’s SVPA program.

Formal nominations from councils and agencies are due to DPIE on 31 July and will be informed by both the UDP Committee meeting as well as ongoing discussions with authorities by individual proponents about their project needs.

The formal budget process then continues within DPIE and through the NSW Government Executive Steering Committee for final funding decisions later this year.

Background

The Hunter UDP Committee was established in 2018 under the Hunter Regional Plan 2036 to facilitate the coordination of infrastructure delivery to support new housing and employment in the Greater Newcastle Metropolitan Area. UDIA strongly advocated for its creation and is an active contributor to its work. The Committee is chaired by HCCDC and sponsored by DPIE, with additional members being the 5 lower Hunter councils, Hunter Water, Transport for NSW, Ausgrid, UDIA, PCA, HIA and PIA. The Committee meets approximately quarterly and released its first Annual Report earlier this year, detailing Hunter housing supply and infrastructure planning and funding.

As part of its role in coordinating infrastructure delivery, the Hunter UDP Committee offers a forum for stakeholders to collaborate and offer input into the State Voluntary Planning Agreement (SVPA) Funding Program. In the Hunter, $18 million in SVPA contributions have been collected since 2010 but none of that money had been spent until the Hunter UDP Committee was formed. To date, $3.36 million has been spent from the Hunter SVPA fund on major roads planning and design at Minmi Road, Main Road Cessnock, and Dora Street Morisset, leaving approximately $15 million still available.