MacroPlan recently assisted the Property Council of Australia’s NSW Division in understanding how individual metropolitan Councils have fared in meeting their assigned housing targets. Our research identified a gaping hole in the past decade’s housing approvals and forecasts an increasing under supply unless approval rates can be substantially ramped up. New home construction is crucial to the State’s economic fortunes — as it underpins growth, jobs and of course, affordability.
The industry generates one in 10 jobs in NSW and pays over $16 billion in wages to workers and their families.
It is crucial we focus on keeping house supply on track or else homebuyers are priced out of the market.
The recent uplift in approvals is encouraging — assisted by lower borrowing costs, smarter policy settings and ideal market settings. But we need to take a long-term view of the State’s capacity to meet demand.
That is why the Property Council of Australia’s NSW Division commissioned research to test progress against housing targets and prospects for the future.
We deliberately did so in each local government area for Sydney — and our three major regions — to test performance on the ground.
The numbers are alarming:
- the vast bulk of local government areas will not reach their targets
- almost half of all councils will struggle to meet 50 percent of the approvals needed to keep pace with population growth
- housing approvals across Sydney fell 56,000 short of target over the past decade
- the deficit is forecast to widen by a further 140,000 homes over the next decade
- our three biggest regions — the Hunter, Central Coast and Illawarra — all face housing shortages, and
It reinforces the case for radical surgery to the way we set targets and translate them into the delivery of new housing on the ground.
The opportunities arising from focusing growth in the right locations, greater densities and easing hurdles across the planning system are substantial. If we get it right, we can tilt the balance back in favour of homebuyers.
About MacroPlan: MacroPlan’s experienced and qualified economists align their understanding of macro-economic forces with micro-economic variables such as geographic and industrial characteristics, demographics, labour market shifts, resource demand and commercial realities. Contact Wayne Gersbach – General Manager New South Wales, today to discuss your property research requirements.