150,000 homes short: Grim figures show Sydney house target shortfall

Explosive new figures have revealed the massive housing shortfall across Sydney, unless some key changes are made by the state government.

Just 6500 dwellings across the Sydney Megaregion are ready to be built, according to the Urban Development Institute of Australia. Picture: NCA NewsWire / Max Mason-Hubers

Barely half of the homes that need to be built in Sydney to meet ambitious housing targets will actually be completed, with the Minns government set for a shortfall of 150,000 homes by 2029.

Explosive new research from the Urban Development Institute of Australia (UDIA) has projected that only 171,400 homes will be built in the Sydney “Megaregion” by 2029, less than 54 per cent of the 322,000 total.

The projected shortfall can be blamed on the combined impact of NSW’s agonisingly slow planning system, a crippling shortage of enabling infrastructure, and environmental constraints.

Across the Sydney Megaregion (comprising Greater Sydney, Central Coast, Lower Hunter, and Illawarra-Shoalhaven), just 6500 dwellings are ready to be built, the UDIA has found.

A staggering 97 per cent are languishing in limbo, waiting for some form of approval or enabling infrastructure before they are made “development ready”.

The forecast is barely half of the homes that need to be built in Sydney to meet ambitious housing targets will actually be completed.

More than 40 per cent of dwellings in the pipeline are waiting for development approval before construction can commence, and 30 per cent of potential homes are being held up by a lack of infrastructure (like water, power, sewer, or roads).

Environmental constraints are also preventing new homes being built; just 10 per cent of residentially zoned land is vacant and unrestricted.

UDIA NSW CEO Stuart Ayres. Picture: NewsWire / Nikki Short

Without urgent action, these constraints will lead to a shortfall of 150,600 homes across the Sydney Megaregion, enough to house some 330,000 people.

A shortfall of 150,600 homes should not be accepted and requires immediate interventions from the NSW Government to enhance housing supply,” UDIA NSW CEO Stuart Ayres said.

“Waiting any longer before taking corrective action on housing supply, will only ensure

more people are denied an opportunity for a place to call home” he said.

“There’s 330,000 people for whom there won’t be a home available on the current trajectory, and so they just have to get absorbed in the existing system. So the only thing that happens in that environment is prices go up,” Mr Ayres said.

UDIA NSW’s report said there is no “single lever” to address the housing crisis, but the peak body has made seven recommendations for speeding up development, including increasing infrastructure investment and giving greater certainty for conservation requirements.

“The Minns government needs to focus on improving the planning system, it needs to invest more in enabling infrastructure, it has to recalibrate its position on greenfield development, where houses are more feasible than infill, and it has to get clear around its environmental laws,” Mr Ayres said.

The forecasts are based on a combination of UDIA NSW’s developer intentions survey with CoreLogic’s Cordell database, and departmental housing supply forecasts.

To meet ambitious housing targets agreed to in national cabinet, 75,000 homes need to be built each year in NSW.

Premier Chris Minns threw in the towel for 2024, conceding to The Daily Telegraph in January that this year’s target will not be met.

Mr Minns has repeatedly blamed the former government for the planning problems constraining development.

“Most of the time and effort of the Premier’s Department, the Minister for Planning and my cabinet has been fixing the mess that you left us,” he told budget estimates on Wednesday.