“No chance” of reaching targets: NSW housing projects reach a decade low

“No chance” of reaching targets: NSW housing projects reach a decade low
Image: Housing Industry Association, Facebook

by JUSTIN COOPER

 

The number of new housing developments across Australia has revealed a decade low, with the NSW Government admitting their ambitious building targets cannot be met.

The target, set out by the federal government in August, would see 377,000 new dwellings built in NSW by 2029.

But latest reports released by the Australian Bureau of Statistics (ABS) revealed a decrease in the number of new houses being constructed, with dips in both multi-unit and detached housing projects.

In their Buying Activity Data, ABS reported that the building of 23,058 new houses had commenced across Australia. This is down 21.6 per cent to reports at the same time last year, making the September quarter the weakest for new developments in over a decade.

The report also noted that multiple development projects had taken a hit over the past year. Multi-unit projects were down 9.6 per cent, with only 13,916 new developments making it the weakest quarter for the sector.

Additionally, only 103,707 detached ‘single-family’ houses commenced in the twelve months to September 2023, falling by 17.0 per cent on the 124,940 projects in the previous 2022 period.

Rising cash rates and supply costs

The Housing Industry Association says the rising cash rate, soaring building costs and shrinking homebuyer power are contributing to the lack of and cancellation of new housing developments.

HIA Senior Economist Tom Devitt says the new data represents a “slow start to National Cabinet’s ambition to build 1.2 million homes over the next five years starting mid-2024.”

“As fewer new projects begin construction, the pipeline of work that Australia’s home builders have under construction is expected to shrink rapidly this year,” warned Devitt.

Devitt says the total of new projects to commence in 2024, including less than 180,000 new multi-unit and detached properties, will still fall “far below the 240,000 per annum required to meet National Cabinet’s target.”

“Meeting (the) National Cabinet’s target will be largely dependent on the delivery of adequate private housing across the housing continuum. This will also have the biggest impact on the cost of housing and rental availability,” Devitt explained.

“Holding all levels of government to account for improving planning regimes, reducing red tape, and supporting the development of appropriate infrastructure and a skilled construction workforce, must be a priority this year.”.

“No chance” NSW will meet its target

As the housing crisis across Sydney continues to grow, NSW Premier Chris Minns says there is “no chance” that the state government will reach this years target of 75,000 new homes.

The National Housing Accord set the goal for the states, which included 377,000 new dwellings in NSW over the next 5 years.

Minns stated that the target would be “difficult to accomplish in 12 months,” and is now aiming to boost the overall supply of housing options.

Planning Minister Paul Scully said that the Premier was being “up-front with people,” blaming the former Coalition government for the ongoing crisis.

“We’re working off a big backlog that we inherited from the previous government but we’re determined to make sure we get there in the future,” said Scully.

“I think a fair-minded person looking at the current climate would understand that we’re working off less than a standing start to try and make up for the housing crisis we inherited from the previous government.”

The Minns Government is now seeking new reforms based on boosting supply over the coming years, but has not specified how many are to be expected.

Following the government’s announcement, NSW Greens Housing Spokesperson Jenny Leong MP expressed the growing need of repurposing buildings and growing affordable housing, especially as much of the state’s public housing is left vacant. 

Posting to Instagram, Leong said, “As labour and material shortages slow down construction across NSW, we can’t rely on new builds alone to meet the growing need for affordable homes.”

Leong pointed out plans from the Queensland Government’s plans to convert vacant hotels and former retirement villages into social housing, a plan which would be viable for NSW.

“Rolling out similar measures in NSW would significantly boost supply for those who need it most,” Leong continued.

New Developments Proven Difficult

Housing developments throughout many inner city suburbs have been difficult for councils and developers to begin and complete.

In the Inner West, recent motions in favour of preserving Heritage Conservation Areas (HCAs) have been criticised by the State Government, saying they have limited the density potential for key suburbs near the city.

During the Inner West Council meeting in December, the grants to broaden HCAs were criticised by some residents as limiting construction and housing affordability.

However, some argued that with sensitive planning, construction on HCA properties can be successful in increasing housing density whilst preserving historic sites.

With the housing market continuing to rise rapidly, planning is a major concern ahead of developing high-density buildings around the Inner City, as well as the quality of buildings.

Recently, a 900-home apartment block in Macquarie Park in Sydney’s north, was declared “at risk of collapse” after serious damage to the building’s concrete structures was discovered.

Leong said the incident is an “important reminder of why any plans to rapidly boost housing supply need to take into account the quality – and not just quantity – of new homes.”

“Our communities urgently need affordable, well-connected places to live – and these homes also need to be safe, accessible, and built to a high standard,” she continued.

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