UDIA reveals direct connection between delays in planning approvals and house prices

The NSW Government’s Productivity Commissioners review into the NSW Planning System in 2021, showed that NSW is the slowest planning system in Australia. With the major reforms in Victoria’s planning system aimed at speeding up building approvals and cutting red tape being announcing today, NSW will be falling further behind.

UDIA NSW research shows that delays in planning approvals are resulting in increased holding costs, which are closely tied to the planning process, especially with rezoning, approval timeframes and the coordinated delivery of utilities.

Delays at these stages will directly and correspondingly increase holding costs for any proposed development and inevitably push up total project costs and house prices.

Our research also identified a dozen Sydney based priority precincts that have experienced a substantial delay in delivery from rezoning through development commencement (>6 years).This is in addition to the lengthy delays to reach the rezoning stage with some taking more than 8 years. We have compared these timeframes to other Australian planning jurisdictions, which notably have shorter precinct release timeframes, especially during the rezoning stage.

Category 

Current NSW performance 

Other states 

Medium Density

200 days

70 to 105 days

High Density

190 days

105 days

Greenfield sub-divisions

130 days

 2nd slowest state – QLD (100 days)

Table showing the figures obtained from the Productivity Commissioner’s White Paper 

UDIA NSW calls for reforms to the NSW planning system to speed up planning approvals so that they are as fast as any other state in Australia.

Steve Mann said “Victoria has recognised the benefits of speeding up the planning system. It will create jobs and help to solve the housing supply and affordability crisis. If NSW aims to be the premier state in everything it does, why is NSW last behind the other states? NSW needs to get more ambitious if it is to tackle the housing supply and affordability crisis we face throughout the state. These are the types of reforms that NSW needs to undertake if the state is to thrive.”

ENDS

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

Housing crisis in the regions needs whole of government response

It is no surprise that there is a housing supply and affordability crisis in the regions and UDIA NSW welcomes the Minister for Planning and Minister for Homes, Anthony Roberts’ comment in Parliament yesterday, acknowledging that “regional housing is a priority for this Government”.

However, it is the extent of the supply shortage that is severe, with the price of houses in regional NSW having jumped by over a third in the last year, and with some markets experiencing price growth of over 50%. The pace of development is not keeping up with demand, leading to a critical shortage of housing extending throughout the regions.

This demand will only be exacerbated by the rate of in-migration as people look for regional housing solutions out of Sydney, as shown in the UDIA/URBIS Home Purchaser Sentiment Survey 2021, where 33% of Sydney respondents indicated an interest in moving outward whether to outer suburbs or to the regions.  Our findings are supported by the release today of the Regional Movers Index from the Commonwealth Bank and the Regional Australia Institute (RAI) which showed that quarterly migration from capital cities to regional areas over the past two years is averaging 15 per cent higher than what it was in the two years pre-COVID 19.

A regional housing supply and affordability crisis can be averted through the funding of critical enabling infrastructure which supports a sustained housing pipeline. UDIA produced significant research on the Illawarra Shoalhaven, the Hunter and the Central Coast in our Building Blocks reports 2021, which showed the gaps in water, sewer, power and roads needed to unlock housing..  In its pre-budget submission, UDIA  NSW has asked the NSW Government to fund $450m worth of State infrastructure over the next 3 years and provide $100m as part of a Regional Accelerated Infrastructure Fund for Councils to bring forward enabling infrastructure and to set up a self-replenishing enabling infrastructure fund so that we can deliver the housing that Regional NSW needs, as it grows.

“UDIA has been advocating for State government intervention focused on building a sustainable supply pipeline of ‘Development Ready’ land that is zoned, fully serviced and with biodiversity arrangements in place. Each of the key recommendations of the Regional Housing Taskforce are aligned with UDIA’s research and now we need the actions from government.” said Steve Mann, CEO, UDIA NSW.“UDIA’s experience on the ground in our regional Chapters recognises the growing housing stress in the regions, where demand has been outstripping supply for many years and COVID has significantly contributed to this chronic problem. It is clear that much more work is needed to unlock housing supply and address the crisis gripping these areas.” Mr Mann added

UDIA NSW calls for a whole of government integrated response to the Regional Housing Taskforce report and urges the NSW Government to follow the recommendations in the UDIA pre-budget submission and to sustain regional housing supply, achieve housing affordability, and support the ongoing economic recovery in regional NSW.

ENDS

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

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.

ENDS

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

UDIA calls for removal of restrictions on construction hours beyond March deadline

Today’s announcement by Treasurer Matt Kean and Minister for Planning and Homes, Anthony Roberts follows on from the decision made in June last year to enable construction work to proceed on Saturdays from 7am to 5pm, except for the carrying out of rock breaking, rock hammering, sheet piling, pile driving or similar activities.

Construction Work is temporarily permitted to occur on weekends, due to the commencement of a new COVID-19 Construction Works Order which takes effect today, 11 February 2022.

The Environmental Planning and Assessment (COVID-19 Development – Construction Work Days) Order 2022 allows certain construction work to occur on Saturday and Sunday without the need for any approval.

The Order permits construction and demolition work to be carried out on Saturdays from 8am to 5pm, with restrictions on noisy works that have not been approved under a development consent. These restrictions are in place to reduce noise impacts on nearby residents.

Building work will also be permitted on Sundays from 9am to 5pm. Construction work undertaken on Sunday cannot include noisy demolition work, exceed a certain noise and vibration threshold, include the use of power tools or playing music from radios or other electronic devices by workers or other people on site.

The new Order will facilitate construction over a broader timeframe in recognition of COVID-19 safety requirements to create safe work environments and minimise project delays.

The new Order is temporary and will end on 31 March 2022.

“Today’s announcement serves to remind the industry of the deadline of 31 March. While UDIA welcomes the Ministers’ acknowledgement of the importance of supporting the construction industry and the 340,000 jobs it supports, we call on the government to remove the restrictions beyond the March period. Our industry has been hit hard from the impacts of COVID and is still playing catch up. We need support to make up the ground lost over the past two years and deliver the homes we so desperately need and improve housing affordability.” said Steve Mann, CEO, UDIA NSW.

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

ENDS

Why can’t I live in Kiama? Homebuyers despair at lack of housing in the region.

Lack of supply, skyrocketing house prices and overly complex planning system have prevented many from realising the Australian dream of home ownership. But according to the Chairs of both The UDIA Illawarra and Shoalhaven Chapters, to understand what has led to this escalating situation, you have to look at a number of facts.  To start with the Kiama Local Government Area has had the highest price growth of any suburb in all of NSW, pricing most out of the market.  An alarming statistic for an area that would typically house essential workers, nurses, teachers, first responders as well as university students who just want an affordable home reasonably close to their place of work and study.

If that seems like a critical issue that should be dealt with by local government… it’s actually not the most extreme story.  A University Professor has been forced to live in his car, families have been forced out of Wollongong due to the significant rise in house prices, people are downsizing – opting to live in apartments rather than houses, just so they don’t have to leave the area and it’s only getting worse.

There are actually very few one and two-bedroom apartments currently available in Wollongong, there may be plenty of cranes, but units are snapped up off the plan before most even know they are available. In 2019, UDIA Illawarra Chapter Chair Simon Kersten presented a report Everything in Place for Recovery which showed that by the end of 2021 the region would be out of apartment stock – sadly that prediction has come true.

Up until a few months ago, people were paying a deposit on a block that they wouldn’t get for two years.  It is next to impossible to buy a block of land to build on and if you are successful, it’s currently a 12 month wait from deposit to being able to start the process of the build.

So, there was light at the end of the tunnel for prospective homeowners when a proposal was put forward to rezone a patch of land that would house 350 dwellings which were given the gateway by the Department of Planning.  However, locals objected to the proposal in such a way that the Minister is now reviewing the rezoning decision.  This is just one example of many such obstacles.  What people may not realise, is when they object to development such as this, they are constraining supply and by effect, raising house prices.

UDIA calls for easier, quicker and less red tape in the planning process and is encouraged that Kiama Council is currently preparing their Housing Strategy. We hope that Council will maintain regular pipeline of housing and make every effort to streamline the planning system, the provision of infrastructure including local roads which state transport does not provide.

Below are some key facts from UDIA’s Greenfield Land Supply Pipeline Report (June 2021) for the Illawarra Shoalhaven region:

  • 7,000 lots that are programmed for delivery by fy29 in the Illawarra-Shoalhaven need enabling infrastructure of water, sewer, power and roads to be delivered.
  • 67 per cent of expected lots are constrained by sewer infrastructure and water infrastructure.
  • Even if current unmet demand is disregarded, at the expected rate of land release there will be an additional 5,700 homes worth of unmet demand for greenfield housing in the Illawarra-Shoalhaven by FY30.
  • If all expected lots are delivered, including those currently facing infrastructure constraints, supply will fall short of demand in the Illawarra-Shoalhaven by 700 lots per annum.
  • Accelerating key rezonings will unlock an additional 600 lots by FY25 without negatively impacting future development. This will significantly reduce the predicted undersupply of new greenfield homes in the Illawarra-Shoalhaven while supporting jobs and generating economic growth.

The Illawarra-Shoalhaven faces significant challenges in meeting the annual estimated demand for new greenfield housing. From FY22 – FY25, the key challenge is to deliver enabling infrastructure, with opportunities to boost supply through accelerated rezonings. Before supply drops off in FY25, the supply pipeline needs to be replenished through the faster release of new precincts.

 For more information or for comments from Chair of UDIA Illawarra Chapter– Simon Kersten or Chair of UDIA Shoalhaven Chapter – Lawson Fredericks,

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

ENDS

$30 million a drop in the ocean for regions struggling to ease housing pressures

UDIA NSW cautiously welcomes today’s announcement by Deputy Premier and Minister for Regional NSW Paul Toole of a new $30million Regional Housing Fund to deliver local infrastructure that supports housing in some regional areas, but insists that NSW Government must do much more to boost regional housing supply and affordability.

This investment is seen as an encouraging first step in implementing the recommendations from the Regional Housing Taskforce and represents a much needed boost to those councils who are eligible for funding to spend on enabling infrastructure and public spaces.

UDIA NSW CEO Steve Mann said “Regional markets represent a third of new housing supply in NSW and these communities have felt the full extent of the housing supply and affordability crisis.”

Residential vacancy in these key regions has been at record lows since 2020, showing that demand for homes is dramatically outpacing supply. Building more houses to meet demand is not easy, with 70% of residential lots which could be developed in the regions still requiring crucial infrastructure before development can occur.  The impact of this supply shortage is severe, with the price of houses in regional NSW having jumped by over a third in the last year, and with some markets experiencing price growth of over 50%. This has put pressure on rental markets, with some regional rental markets such as Broulee having seen weekly rents double over the same period.

“We have a once-in-a-generation opportunity to build durable, development-ready supply pipelines that can meet demand, produce a more balanced housing market and make home ownership more affordable and UDIA is keen to see further investment made available to the regional councils that are experiencing the highest rates of growth and are under the worst housing supply pressures” said Mr Mann.

UDIA recently released Building Blocks Reports that show the Hunter region needs $522 million to unlock 41,000 homes and the Illawarra Shoalhaven region needs $137 million to unlock 22,000 homes.  It is clear that much more work is needed to unlock housing supply and address the housing affordability crisis gripping these areas.

UDIA Hunter Chapter Chair Geoffrey Rock and Illawarra Chapter Chair Simon Kersten were understandably cautious about the announcement of a regional program that does not include their regions. “If the NSW Government is serious about delivering housing supply in the regions, it must commit to serious investments to deliver the critical enabling infrastructure that has already clearly been identified,” they said.

UDIA Central Coast Chapter Chair Caine King said “We are pleased to see that the Central Coast Council made the short list, however $1.4 million is really just a drop in the ocean when we know that the Coast needs $186 million in infrastructure to unlock those houses as identified in the UDIA NSW Building Blocks Central Coast Report. UDIA’s significant piece of research details the water, sewer, roads and power projects that need to be delivered before 12,000 new homes can be built on the Coast.

UDIA sees it as encouraging that the government is continuing to work on addressing this problem, and looks forward to the government’s next announcement which needs to be a game changer in terms of proportional investment in the regions and should include these recommendations from UDIA’s  Submission to the Taskforce:

  • Establish enhanced UDP Committees and better cross-government coordination effectively plan for adequate housing supply and support development-ready land that is approved, with enabling infrastructure and biodiversity arrangements in place;
  • Accelerate housing delivery by creating a $1bn fund to be invested over three years (like the Housing Acceleration Fund) to build enabling infrastructure, with proportional allocation to each region;
  • Create a sustainable housing pipeline by accelerating approval of current proposals and encouraging more housing diversity.

ENDS

Media Enquiries:
Deanna Lane 0416 295 898 or dlane@udiansw.com.au.
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