Census data supports UDIA’s report on need for steady supply of Apartment development

Today’s release of the 2021 Census results revealed that the proportion of NSW residents living in flats or apartments has risen 9% since the last census to 21.7%.

“As NSW’s population has now passed 8 million, the swing to apartment living ramping up, means that there is a critical need for a sustainable supply of this type of dwelling, particularly as overseas migration numbers strengthen and international student numbers continue to increase,” said Steve Mann, CEO, UDIA NSW.

The NSW Productivity Commission White Paper 2021 identified a backlog of 40,000 dwellings at the start of 2021, and assuming all currently forecasted apartments are completed without delays, supply will still fall short of the estimated increases in demand between now and mid-2026, with cumulative unmet demand estimated to reach at least 60,000.

This is consistent with the UDIA Apartment Supply Pipeline Report (2021), which showed that as 75% of the apartment pipeline forecast to deliver supply through to 2026 is still to commence construction and facing constraints due to pre-sale requirements, financing difficulties, controls impacting feasibilities and lengthy VPA negotiations, there are significant risks that completions will be lower than expected.

“If we want to keep affordability where it is today, let alone improve affordability, we will need to significantly boost new project commencements and momentum in the apartment supply pipeline,” said Steve Mann..

For every 200 apartments which commence in NSW, the total economic impact is $255 million and each project of this size delivers 127 direct jobs and, with the multiplier into the broader economy, 318 total jobs.

UDIA calls on the NSW Government to deliver policies to drive commencements now, which will enable development of apartment dwellings and at the same time, support jobs and the economic recovery we all want to see in NSW.

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

Hunter Region needs infrastructure investment too

UDIA welcomes the funding announced in today’s NSW Budget for ongoing and new infrastructure projects that will support the overall economic development of the Hunter region, such as the M1 extension, Newcastle Inner City Bypass, Nelson Bay Road upgrades, and initial investment in longer-term fast rail. UDIA also welcomed the initial $3 million allocation to improve Mandalong Road, supporting new development in Morisset.  Overall, however, with the importance of the Hunter Region to NSW, UDIA expressed its disappointment that today’s NSW Budget did not include critical funding for state road infrastructure to directly unlock housing supply in the Hunter.

Within the state’s fastest growing population corridor, supply of new serviced greenfield housing lots has not kept up with demand in the Hunter.

An increasing under-supply of housing is expected to continue to cause prices to rise. New house prices in the Hunter have increased by approximately 35% over the past year up from 16.1% last year.  We now have a median price in Newcastle of $850,000, up from $675,000 at this time last year.

UDIA has been calling on the NSW Government, both directly and through our participation in the Regional Housing Taskforce community discussions, for housing supply to be boosted.

UDIA’s Building Blocks – Hunter report identified $146 million in state road funding that would unlock 18,000 new homes for the lower Hunter.

Disappointingly, none of these roads gained funding in today’s Budget. A new Homes for Regions program was announced, with $46.4 million over five years to support priority enabling infrastructure and government-led developments in regions, although it is unclear whether the lower Hunter will have access to this program.

UDIA calls on the NSW Government to back up its pledge to address housing affordability by investing in the state road infrastructure needed to increase housing supply.

The Budget does support housing supply in other ways, and UDIA welcomes:

  • $300m for the Accelerated Infrastructure Fund across the state, which could support the delivery of local infrastructure such as the $102 million in local Hunter roads identified in UDIA’s Building Blocks – Hunter report.
  • $33.8 million for the Regional Housing Development Program, including expanding the Urban Development Program (supporting 127,000 new homes in the 10-year pipeline).
  • $106.7m over three years to create a Biodiversity Credits Supply Fund, which will provide a much-needed intervention to kickstart the biodiversity offset credit trading market by guaranteeing landholders will be able to sell the biodiversity credits they generate when they choose to use their land for conservation purposes. The Fund is intended to encourage more biodiversity protection while also supporting new housing supply by making it easier to offset any necessary biodiversity impacts from development.

UDIA will continue to strengthen our advocacy work in this regard to achieve the focused investment that our region needs.

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

Central Coast to benefit from NSW Budget investment in road network

UDIA welcomes the $326.5m to improve the road network on the Central Coast and invest in fast rail, which are critical initiatives to support the economic development and liveability for the Central Coast.

As the Central Coast continues growing, demand for housing has been rising due to a combination of record low interest rates, government incentives, and migration to the regions influenced by COVID-19 induced demand for more space and a growing preference for working from home.

As a result, demand is outstripping the supply of new homes, and prices are rising.

New house prices across the Central Coast have increased 31% over the past year, with the median price of a new house in the Central Coast LGA at $920,000 in March 2022.

The budget’s $300m in Accelerated Infrastructure Funding could support the delivery of local infrastructure such as the $126 million in local roads and water and sewer infrastructure identified in UDIA’s Building Blocks – Central Coast report, which would unlock 12,000 new homes on the Central Coast.

Overall, however, we are disappointed there is no funding in today’s NSW Budget for state infrastructure to directly support housing supply for the Coast.

UDIA calls on the NSW Government to back up its pledge to address housing affordability by investing in the infrastructure needed to increase housing supply on the Central Coast.

The Budget does support housing supply in other ways, and UDIA welcomes:

  • $33.8 million for the Regional Housing Development Program, including expanding the Urban Development Program.
  • $106.7m over three years to create a Biodiversity Credits Supply Fund, which will provide a much-needed intervention to kickstart the biodiversity offset credit trading market by guaranteeing landholders will be able to sell the biodiversity credits they generate when they choose to use their land for conservation purposes. The Fund is intended to encourage more biodiversity protection while also supporting new housing supply by making it easier to offset any necessary biodiversity impacts from development.

UDIA will continue to strengthen our advocacy work in this regard to achieve the focused investment that our region needs.

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

Western Sydney to benefit from NSW Budget investment commitment

UDIA NSW is encouraged by the investment in infrastructure projects for Western Sydney announced today in the 2022-23 NSW Budget.

“The commitment to Western Sydney is extremely encouraging, particularly as the projects announced align with those identified in UDIA NSW Building Blocks Greater Western Sydney Report 2021 to enable growth,” said Steve Mann, CEO, UDIA NSW.

The Building Blocks report pinpointed the missing catalytic infrastructure on land that is rezoned and ‘ready to go’ and which could unlock approximately 69,700, lots in key areas of Western Sydney, creating 40,000 jobs and delivering close to $17 billion to the NSW economy over the next three years.

Today’s commitment of $1.5bn for Western Sydney growth roads program to accommodate employment growth roads include:

  • Mulgoa Road
  • The Horsley Drive
  • M7 Motorway to Cowpasture Road
  • Appin Road – (Commonwealth Government funded)
  • Springfarm Parkway Road
  • Mamre Road
  • M4-Erskine Park Road
  • Memorial Avenue – Old Windsor Road to Windsor Road
  • Western Sydney Long Term Strategic Transport Corridor Preservation
  • $1.2bn towards the M12 Motorway to support the Western Sydney airport
  • $243.1m on Prospect Highway Reservoir Road and St Martins Crescent

“A focus on enabling infrastructure can deliver a double dividend, with jobs building infrastructure as well as jobs building new housing for Western Sydney,” said Mr Mann. “UDIA has been leading the discussion for city development in Greater Western Sydney through our NextGen West campaign, working with BWS to identify the key issues and opportunities to at last get it right for the west,” he said.

There are three additional announcements in today’s Budget, which have been key areas of advocacy for the campaign:

$680.5m for the Parramatta Light Rail Stages 1 and 2
UDIA NSW welcomes the investment in the Parramatta Light Rail. This key city shaping project is an essential transport enhancement that will link the Sydney Rail network to existing centres and future growth precincts in the Central River City and the Parramatta CBD. The Light Rail will support the delivery of housing diversity and demand in the Central River City, which is expected to take the bulk of future growth in Sydney over the next 5-10 years. This includes up to 44,000 dwellings to support an extra 300,000 residents.

“UDIA sees this as a great opportunity to deliver 30-minute city principles linking existing and future growth centres of Sydney Olympic Park, Wentworth Point, Melrose Park, and the Camellia Rosehill Precinct with the fast-developing Parramatta CBD,” said Steve Mann.

$60m to develop a final business case for a south-eastern extension of the Sydney Metro Western Sydney Airport Project from the current southern terminus at Bradfield to Glenfield. 
UDIA welcomes this investment as we have been working with University of Sydney Professor David Levinson to show the access benefits of this connection for South West Sydney.

$246.1m has been allocated for important cultural infrastructure:

  • the new Powerhouse Museum in Parramatta; and
  • expansion of Museum Discovery Centre in Castle Hill.

“UDIA NSW applauds this strong focus on investing in Western Sydney, which has borne the brunt of the pandemic shutdowns and is weighed down with housing affordability pressures and which requires significant infrastructure upgrades in the years ahead,” added Mr Mann.

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

NSW Budget commits investment for homes to support families

Today is the first budget under Premier Perrottet, which has given a real sense of the direction that he wants to take NSW.

“At a time when families are feeling the pinch with rising interest rates, escalating food prices and energy, it is good to see the NSW Government putting forward an approach that will put downward pressure on the single biggest item in household budgets whether you own or rent – the cost of a roof over your head,” said Steve Mann, CEO, UDIA NSW.

UDIA NSW has consistently been calling on the Government to make housing supply a key priority to deliver the homes that the people of NSW need and improve housing affordability. It was therefore pleasing to see $2.8bn allocated in today’s Budget for a Housing Package, to support housing access and affordability:

  • $780.4m for the Shared Equity Scheme
    Saving for a deposit can be one of the obstacles to home purchasing, under the scheme, those who have a deposit of just 2% of the purchase price and who meet the eligibility criteria can access a 40% contribution from the NSW Government for a new home and 30% for an established home. This pilot has the potential to support 3,000 first home buyers for key workers.
  • $728.6m only for first time buyers to pay property tax instead of stamp duty as an option;
    We welcome the support for first home buyers to be able to opt into the housing market and remove the need to pay a large stamp duty cost upfront. This is a small first step into structural reform away from Stamp Duty which is a regressive tax and which is one of the biggest financial barriers to home ownership and housing mobility.
  • $300m for Accelerated Infrastructure Fund (AIF)
    AIF Funds are modelled on the need to get local infrastructure projects moving by supporting councils to activate developer contributions that are held by Councils. Removing the constraints that have been hampering efforts to build the houses that communities need, will help councils deliver development ready land – (land which has water, sewer, roads, power and biodiversity approvals) together with a focus on speeding up the slow planning system.

Other positive measures included today,

  • $300m for maintenance and upgrades to 15,800 social housing properties;
  • $174m for 271 new homes for key workers in regional and remote NSW;
  • $89m to reduce planning and assessment timeframes;
  • $73.5m for planning and rezoning in state led precincts;
  • $37m for 120 social housing dwellings;
  • $33.8m for Regional Housing Development.

The investment commitment announced today, combined with the announcement to support the biodiversity offsets market, can unblock significant development ready land and support the supply of greenfield homes over the next few years.

UDIA NSW welcomes the government’s efforts to improve housing supply with this package, which will make a good short term difference to housing supply. However, we also need to see structural reforms that ensure that we deliver housing supply year-in, year-out and which means policy reforms to simplify the planning system to make it faster and easier to build great places for people to live and work.

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

Addressing lack of housing supply needs ongoing investment to tackle affordability

Today’s announcement by Premier Perrottet of the much-needed investment in enabling infrastructure is both welcome and long overdue according to UDIA NSW.

Steve Mann, CEO, UDIA NSW said, “This $500m investment combined with last week’s announcement on supporting the biodiversity offsets market, will unblock significant development ready land and support the supply of greenfield homes over the next few years. These policies, together with yesterday’s announcement of a shared equity scheme, will go some of the way towards addressing housing affordability in the short term.”

“Now, with significant funding provided to the NSW Department of Planning to accelerate rezonings and approvals, we need to see results quickly, with dwelling approvals down 24% from the supply peak”, said Mr Mann.

Removing the constraints that have been hampering efforts to build the houses that communities need, with the proposed $300m investment to help councils deliver development ready land – (land which has water, sewer, roads, power and biodiversity approvals) together with a focus on speeding up the slow planning system, is a step in the right direction for NSW.

The government’s acknowledgement of the need to build infrastructure in regional communities is supported by UDIA’s Building Blocks 2021 research reports which outline where the enabling infrastructure needs to be delivered in key regional markets including the Hunter, Central Coast and Illawarra Shoalhaven.

The government’s proposed $33.8m investment over four years to address housing supply in regional NSW is consistent with our submission to the regional Housing Taskforce, including the need to provide more certainty about where, when and what types of homes will be built.

A number of our recommendations in UDIAs pre-Budget submission are closely aligned with today’s investment announcement, UDIA also recommends:

  • The NSW Government funds $450m worth of state enabling infrastructure over the next 3 years.
  •  Policy support to get apartment projects under construction, that traditionally account for 60% of supply of new homes in NSW, but remain 43% down from the 2016 peak.

Whilst UDIA applauds the government’s announcement today, improving housing affordability requires a long-term plan for investing in development ready land and improving the slowest planning system in Australia.  We need to spend the next two years developing solutions that will enable consistent funding to avoid the feast or famine cycle that we have been in over recent years and a permanent fix for the planning system.

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

A problem shared – shared equity can lead to greater home ownership in NSW

UDIA NSW welcomes today’s announcement by NSW Premier Dominic Perrottet of the government’s shared equity scheme. “It’s good to see the NSW Government introducing policies so that more people can buy a home,” said Steve Mann, CEO, UDIA NSW.

Saving for a deposit can be one of the obstacles to home purchasing, under the trial, those who have a deposit of just 2% of the purchase price and who meet the eligibility criteria, can access a 40% contribution from the NSW Government for a new home and 30% for an established home.

The scheme applies in Sydney, and regional centres including the Central Coast, Illawarra, Lake Macquarie, Newcastle and the North Coast of NSW, and where the maximum value of the property is $950,000 and $600,000 in other parts of NSW. The scheme offers up to 3,000 spots each year for two financial years.

Home ownership for key worker first home buyers ie, nurses, teachers or police – as well as older singles over 50 and single parents with any children under 18 years old, has now become one step closer in realising the great Australian dream of owning their own home.

“Whilst this policy is helpful, the housing affordability crisis will only be resolved if we build more homes across the state. I hope that we also see measures to improve the supply of new homes in the budget,” added Mr Mann.

In UDIAs pre budget submission we made a number of suggestions to boost housing supply, including funding $150m of enabling infrastructure each year and schemes to support pre-sales in the apartment market.

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

UDIA welcomes NSW Govt announcement on faster rail times to Wollongong

UDIA welcomes the NSW Premier’s announcement of a new $500 million commitment in the 2022-23 NSW Budget as part of the NSW Government’s Fast Rail vision designed to implement improvements to cut delays and make faster travel times a reality.

While the funding will go to the first stage of the Northern Corridor, the Premier said the NSW Government’s Fast Rail vision could slash travel times between Sydney and Newcastle to one hour, Sydney and Gosford to 25 minutes and Sydney to Wollongong in just 45 minutes.

In our 2019 Strategy “Unlocking to the Illawarra Shoalhaven”, we called for fast rail between Sydney and Nowra to support the growth of this region, which needs to accommodate a further 100,000 people by 2041.

Fast rail infrastructure has long been promised between Sydney and Wollongong, with a fast rail link proposed in the government’s Action for Transport, 1998. Whilst it has been long time coming, UDIA supports this initial investment to better link Wollongong and Sydney

Recent research commissioned by UDIA, and undertaken by the University of Sydney, concluded that cities must be built around access. This fast rail proposal will strengthen the Wollongong CBD which has experienced significant apartment growth in recent years, and which is also set to continue. It will enhance 15-minute and 30-minute city principles by allowing residents easier access to work options both in the Illawarra Shoalhaven and throughout Greater Sydney.

The fast rail is designed to improve connections as part of the Government’s six cities vision according to Minister for Infrastructure, Cities and Active Transport, Rob Stokes and will support the growth of jobs especially those in the health sector, as well as future science and engineering-based jobs at the proposed Port Kembla Hydrogen Hub.

“The fast rail has the potential to establish Wollongong as a premier city in the Greater Sydney Region and it is great to see the NSW Government take the initial steps to deliver this key city shaping infrastructure that will benefit the Illawarra Shoalhaven,” said Simon Kersten, Chapter Chair of UDIA Illawarra.

UDIA urges Government start immediately on this significant infrastructure project and for further work to occur on the option to better link Wollongong with Nowra with improved rail services.

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

Biodiversity Credits Supply Fund welcomed but more work needed to deliver new housing supply alongside better outcomes for biodiversity

UDIA NSW welcomes today’s announcement that the NSW Government will invest in addressing the shortcomings of the current biodiversity offsetting scheme, which is making housing more expensive, even as it falls short on meeting its biodiversity conservation aims.The NSW Government announced it will create a Biodiversity Credits Supply Fund with $106.7 million over three years as part of the upcoming NSW Budget.

The Fund will provide a guaranteed government purchaser for biodiversity credits from landholders who choose to conserve their land, and a central source for private and public proponents to find offset credits. The Fund is intended to encourage more biodiversity protection while also supporting new housing supply by making it easier to offset any necessary biodiversity impacts from development.

UDIA has been advocating for investment in the biodiversity offset system for many years and our  Pre-Budget Submission to the NSW Treasurer called for the establishment of just such a Biodiversity Credits Supply Fund.

UDIA estimated that an investment of $100 million could cover the short-term needs of the urban development sector alone, noting we have estimated that more than $3 billion in biodiversity offsets are going to be required for housing and employment land development in the years ahead across NSW.

“The offset credit trading market has never functioned properly since it was set up five years ago under the Biodiversity Conservation Act,” said UDIA NSW CEO Steve Mann. “We have a chronic under-supply of offset credits in the market, which is contributing to our ongoing under-supply of housing and rising house prices. The new Biodiversity Credits Supply Fund is a significant step forward to provide a much-needed intervention to kickstart the biodiversity offset credit trading market and support more housing supply.”

UDIA sees the Biodiversity Credits Supply Fund as a positive first step to improve environmental outcomes and support housing supply. However, we are concerned that the size of the initial investment of $106.7 million over 3 years, may be insufficient to cover new housing as well as job-generating projects and government infrastructure projects.

In the longer term, a more strategic approach to biodiversity conservation is needed particularly for areas like the Lower Hunter/Greater Newcastle and Central Coast. Projects in these high growth areas in the east coast Sydney Megaregion are finding it very difficult, uncertain, lengthy, and costly to navigate the NSW Biodiversity Conservation Act 2016.

“The NSW Government should also invest in accelerated strategic conservation planning in the Hunter and Central Coast,” said Mr Mann. “A regional biocertification project was started for the Central Coast but it has stalled due to lack of funding. Government should complete that regional biocertification project for the Central Coast and start the process in the Hunter as a high priority to protect and enhance the environment, while also enabling sustainable development.”

UDIA NSW worked with EMM to produce an “Issues paper on the NSW Biodiversity Offsets Scheme” (September 2021) which provides a detailed analysis on how to improve the biodiversity offsets scheme. The report can be found at this link.

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Foreign investors surcharge a negative for people of NSW

The announcement by NSW Government of a 2 per cent surcharge on foreign investors’ land tax for residential real estate would increase to 4 per cent in this month’s state budget is concerning according to UDIA NSW.

It appears that the current NSW Government believes increasing taxes and discouraging investment will not have a negative impact.

With significant increases in the chances of an economic downturn from high inflation and rising interest rates and many predicting a significant downturn in the housing market in NSW, the last thing that the NSW Government should be doing is discouraging investment in housing and economic growth.

Unsurprisingly, this is contributing to the least affordable homes in Australia and some of the least affordable in the world, undermining the very essence of what it means to give everyone a ‘fair go’ in NSW.

“By hitting foreigners with a surcharge, this tax hike might be seen as good politics, but it will be the people of NSW who will end up worse off as a result,” said Steve Mann, CEO, UDIA NSW.

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