- ABS figures show approvals have fallen by almost a quarter since April
- During July, approvals declined by almost 10% in NSW
- Several industry bodies have repeated calls for planning reform
A decline in housing approval rates across New South Wales is causing concerns among the housing market, the Property Council of Australia (PCA) has warned.
Recent figures from the Australian Bureau of Statistics (ABS) show approvals for private houses have fallen by more than 24% from the high recorded in April.
Highlighting the shortage of houses, in the year to March 2021, New South Wales delivered 29,500 new homes, short of the 42,000 the Greater Sydney Commission said is needed to service the population.
In seasonally adjusted terms the number of dwelling approvals fell by 9.9% in NSW during June , while in Queensland it rose by 9%.
“A reduction of nearly 10% in dwelling approvals in New South Wales is a concern when we are already not meeting housing targets across the state, and have a 50,000 dwelling shortfall to make up from previous years,” said NSW Property Council executive director Luke Achterstraat.
“Undersupply of housing affects all of us, but in particular those looking to enter the increasing costly housing market.
“The people of New South Wales deserve the option to live in a house of their choosing – the right location, the right size, and importantly one that is affordable.”
Across Australia, the total value of residential buildings fell by 6.6%, with 7.6% of this fall coming from new residential buildings although there was a 0.1% rise in alterations and additions – possibly due to many Australians spending more time at home or a hangover from the HomeBuilder program.
“The delay in obtaining approvals is adding significantly to the cost of housing – holding costs for property are high and greatly increase risk and deter investment,” noted Mr Achterstraat.
Planning reform needs to meet demand
Mr Achterstraat argued that Queensland’s more speedy dwelling approvals process is something New South Wales needs to explore to attract greater investment to boost housing supply, echoing similar calls made by REINSW and the UDIA.
“The New South Wales planning system needs to ensure the cumulative impact of planning reforms result in the approvals becoming faster, more efficient and less complicated,” he said.
“New South Wales has the least performing planning system in the country and processes development applications are slower than the rest of the country.
“The failure to meet demand for new housing is driving up prices and the everyday Australians are suffering the consequences. Without addressing supply, we have a multi-generational issue that will price aspiring homeowners out of the market, and potentially lose talent to other states with more affordable housing markets.