Sydney housing construction breaks all-time record

SYDNEY is the grip of the biggest housing building boom since Daddy Cool released ‘Eagle Rock’ and Cheezels hit corner stores with the number of homes completed breaking the all-time record set in 1971.

SYDNEY is the grip of the biggest housing building boom since Daddy Cool released “Eagle Rock” and Cheezels hit corner stores with the number of homes completed breaking the all-time record set in 1971.

In a sign Sydney is undergoing its greatest residential transformation since it was first populated, the latest NSW Department of Planning figures show 35, 871 new homes were completed in the year to February.

The completion figures surpass the record of 35,687, which has held since the department began collating construction data in 1949.

Figures show 35, 871 new homes were completed in the year to February.

However, the boom has failed to take the heat out of the Sydney property market with median house price soaring to almost $1 million.

The trend puts further pressure on the Berejiklian government to implement significant housing affordability measures at its June State Budget to help young families crack into the market.

While housing construction activity has been spread across greater Sydney, although two-thirds of new homes were built in or west of Parramatta.

In the Parramatta local government area, there were 5,067 homes and apartments completed in the period, or around 13 a day.

The next busiest council area was Bayside near Botany Bay where 3,466 homes and apartments were finished.

Two-thirds of new homes were built in or west of Parramatta..

Another 2,854 housing completions were recorded in Blacktown followed by 2,313 in Camden.

The construction boom is set to continue with the Department estimating another $22.5 billion worth of housing underway.

Planning Minister Anthony Roberts said the activity would help first homebuyers enter the market as more housing opportunities came on line.

“The last time housing completions were anywhere near this high was when Daddy Cool’s Eagle Rock was at the top of the pop charts, a burnt orange Chrysler Valiant was one of the most popular cars and a loaf of bread cost just 21 cents,” he said.

“Our number one priority is increasing supply which means getting more homes built.

“The number of new homes completed in the year to February 2017 was higher than in any other 12-month period in recorded history, and 30 per cent higher than the latest four-year average.”

Among the measures the Berejiklian government is understood to be considering to address the housing affordability crisis include cutting red-tape to boost developments in priority precincts across the State.

Supply is likely to catch up to demand in Sydney in the ‘next 12-18 months’.

According to the departmental data, the lowest period of housing construction occurred in 2009 when yearly completions averaged 14,000.

Commsec chief economist Craig James said while there was a risk the construction boom could see an “overshooting” supply, the market was likely to suffer an “indigestion” problem rather than a crash.

Given the glut of apartments being built, there may also become a price disparity between units and freestanding houses.

“What we are likely to see when the new homes come on is localised oversupply, but I think it will be more of an indigestion problem than anything else,” Mr James said.

“We are starting to see a lot of apartments being built, but to a lesser extent freestanding houses.

“What we may see is a price disparity between houses and apartments with demand for houses remaining strong, but downward pressure on apartments. These are some of the things investors will need to consider.”

Mr James said supply was likely to catch up to demand in Sydney in the “next 12-18 months”.