Leppington, Austral housing precinct: Sydney Water services delays 5800 homes to 2026

The construction of thousands of homes in Sydney’s southwest will be delayed after Sydney Water underestimated the demand for housing when planning new services.

Housing supply in a western Sydney boom suburb is set to dramatically stall after a failure by Sydney Water to meet deadlines on new services was sparked by underestimations in demand for new homes.

Reports from the government agency to the property industry, obtained by NewsLocal, revealed Sydney Water suffered from a planning blunder when it committed to the delivery of services to thousands of homes in the Austral, Leppington growth precinct by 2022.

New forecasts suggest services expected to service a further 7500 homes won’t be completed until 2026 — as Sydney Water bosses propose an ‘interim servicing option’ capped at 1700 homes for the end of next year.

The major delay comes just days after NewsLocal revealed property developers, builders and tradies have foreshadowed a housing supply and affordability crisis in the southwest as land supply stalls and prices skyrocket.

Serious issues have been raised over infrastructure delays in Austral. Supplied by Greater Sydney Commission

Crownlands Developments general manager Philip Scott said he feared the delay in services will place further strain on an already under-pressure housing supply chain — with an estimated 5800 homes left on the chopping without services.

“There was a rapid change and spike in demand for housing in the southwest, which has continued for over 12 months,” he said.

“The demand for housing in this precinct has been off the charts, and it is no surprise Sydney Water underestimated that demand.

“But to say that there will be no increased supply for four years — coupled with the lack of land releases across southwest Sydney — suddenly this has caused a critical housing shortage.”

Mr Scott said the government agency had been “open and honest with the industry” regarding the delay: “they need to do more, but they also recognise this”.

In the report to industry leaders, Sydney Water Major Projects Director, Nelly Berry said the agency’s interim plan was designed to be “shovel ready to respond to changes and growth”.

“The proposed interim servicing options leverage infrastructure that will form part of the ‘ultimate’ solution,” she said.

Pictured in Leppington in western Sydney are Romeo Tamburri, Emilio Raco and Antonio Gerace. They are unhappy with the way land release and the building homes is being handled in western Sydney. Picture: Richard Dobson

Practical Homes boss, Emilio Raco said Sydney Water “dropped the ball and first home buyers, tradies and builders are the ones suffering”.

“We have a multimillion-dollar investment in local display villages, which we built because of Sydney Water’s commitment to infrastructure,” the home building boss said.
“This has all gone to waste because we can’t sell serviced land.”

Mr Raco said the building industry was “dying in the water” as a five year wait for more land supply is expected to “drive land prices through the roof”.

“Sydney Water made a commitment to completing this infrastructure, and they haven’t fulfilled this commitment,” he said.

“They have ruined the dreams of thousands of first-home buyers and are killing the income of just as many tradies, salespeople and builders.”

Wastewater Treatment Plant rollout to services the growing Austral housing precinct won’t be completely operational until 2026.

In correspondence with the development industry Sydney Water commercial framework manager, Wayne Jackson said priority for the 2022 interim solution — capped at 1700 homes — “would be given to customers according to location within the sub-catchment clusters” across Austral.

A Sydney Water representative told industry leaders a “change to the forecast density” was a key driver in the delayed completion of services.

“The catchment’s density has more than tripled due to increased dwelling yields in surrounding precincts following finalisation of Western Sydney Aerotropolis precinct zoning announcements,” the representative said.

“The increased servicing demand within the catchment requires more complex and larger

scale infrastructure.”

Just 1700 homes will be able to be built in the precinct until 2026 due to a lack of completed wastewater services.

Meanwhile a spokeswoman for the agency said Sydney Water’s approach “prioritises lots with current development applications which will be serviced by mid-2022 – approximately six months later than originally forecast”.

“Sydney Water expects to finalise delivery of wastewater infrastructure to the wider catchment by in 2026,” she said.

Liverpool Council chief executive Dr Eddie Jackson said the council had raised its concerns with Sydney Water “regarding the timing for the delivery of sewerage infrastructure to support development in the Liverpool Growth Centres”.

“Council will continue to work with Sydney Water and the NSW Government to ensure the timely delivery of infrastructure to support development in the Liverpool Growth Centre,” he said.