Sydney housing crisis: $9 billion decline in developer investment in NSW

NSW has experienced a $9 billion decline in investment by developers in the last financial year, as the number of applications submitted and approved plummets.

NSW has experienced a $9 billion decline in investment by developers in the last financial year, as the number of applications submitted and approved plummets.

Just $21.251 billion worth of development was submitted across NSW in the 2023-24 financial year, according to new data from NSW Planning, compared to a massive $30.324 billion in 2022-23.

It comes as the number of development applications submitted across the state saw just 55,668 in the last financial year, down from 64,980 in 22-23 and a massive 81,158 in 2021-22.

NSW Planning performance data for the 2023-24 financial year also showed the number of development applications determined by councils and government agencies witnessed a 12,885 decrease from 49,987 in the 2022-23 financial year, down to 37,102 in 2023-24.

A construction site in the Parramatta CBD. Picture: NCA NewsWire / Damian Shaw

Urban Development Institute of Australia NSW boss Stuart Ayres said current economic conditions facing NSW developers were “the worst they have been in living history”.

“Costs for developers are rising on all fronts,” he said. “From the price of supplies, to wage rises, government fees and rising financing costs.

“Meanwhile, the economic capacity of the buyer to finance the purchase of property is also challenged.”

Premier of New South Wales Chris Minns pictured speaking to Stuart Ayres CEO of the Urban Development Institute of Australia at the Urban Development Institute of Australia NSW Winter Luncheon at the Four Season Hotel, Sydney CBD. Picture: NewsWire / Damian Shaw

Mr Ayres issued a warning to the state government that despite a push for ‘transport orientated development’ to fill the housing gap, “development won’t come out of the ground close to train stations just from a change of policy”.

“There is no single type of home that will solve the housing crisis – it is going to take a network of plans.”

NSW housing crisis: 11,000 homes rejected by NSW Planning in 2023-24 financial year

Mr Ayres said an increasing number of developers had fallen into liquidation in the last twelve months, placing more pressure on the industry.

In June, The Sunday Telegraph revealed four construction businesses across NSW had fallen into liquidation every day in the last financial year.

A total of 1684 NSW-based construction businesses fell into liquidation in the 2023-24 financial year, with haemorrhage cashflow, rising costs, declining consumer confidence and mounds of red tape to blame for dire circumstances.

Investment in development has dropped $9 billion in the last financial year. Picture: NCA NewsWire / Simon Bullard.

Planning Minister Paul Scully said the NSW Government had undertaken the “largest rezoning in the state’s history to turbocharge housing supply”.

This month, the government rolled out the first of its low-and mid-rise housing reform.

“Our reforms will help increase the number of social, affordable, key worker and market homes in NSW as we work towards our shared target of 377,000 new homes during the period of the National Housing Accord,” he said.