‘Targets without a plan’: Sydney housing goals slammed

A goal of building about 75,000 homes a year to help ease the state’s housing crisis could fail at the first step — as the construction industry talks up its struggles.

Councils and the construction industry have slammed the NSW government’s new housing targets as nothing more than “numbers on a piece of paper”, raising fears a building industry on its knees will be unable to hit the state’s goals.

Industry figures say skyrocketing material costs, labour shortages and soaring interest rates have made building new homes unviable, with more than 2000 construction companies collapsing in nine months.

Master Builders Association NSW executive director Brian Seidler said a lack of skilled workers able to contribute to a home-building boom was one of the key threats to hitting housing targets, as well as high interest rates driving many building firms to the wall.

“The development industry are saying publicly and privately that the cost of doing building is now making a lot of projects not viable,” Mr Seidler said.

Australian Securities and Investments Commission figures this year show 2142 construction companies were put into external administration in the nine months to March 31.

Developer Fabrizio Perilli says current economic conditions are making it difficult to build new homes. Picture: Tim Hunter

Property Council NSW executive director Katie Stevenson said the collapses were due to cold economic headwinds … with skill shortages, materials costs and interest rates biting hard.”

“The targets don’t mean the state government can wash its hands of responsibility for creating the right environment for us to build the homes we need,” she said.

Planning and Public Spaces Minister Paul Scully. Picture: Nikki Short

The government’s housing targets announced on Wednesday require about 75,000 new homes to be built annually to meet a five-year target of 377,000 homes.

Last year NSW completed just 46,000.

Peter Gangemi, the mayor of The Hills which has the largest housing target in the city of 23,300 homes over five years, doubted those goals would be hit.

“We think the targets are unfeasible and unreasonable. Its targets without a plan,” he said. “You can’t rezone or DA approve your way out of a housing crisis.”

Fairfield Mayor Frank Carbone — whose area’s five-year housing target has risen from 3760 to 5900 — said taxes and charges were the key driver of making housing development unaffordable.

His council will drop taxes on new homes in the area and he has implored the government to do the same.

“The government should make building new housing more affordable by reducing taxes … at the moment, all they’re doing is putting numbers on a piece of paper,” he said.

Planning Minister Paul Scully on Thursday appeared to rule out cutting any levies, saying it would cripple the building of new infrastructure needed for homes. But he conceded the current climate was challenging for builders.

Mr Scully said skilled workers in NSW were currently being sucked up by major infrastructure projects, but would “come back into the residential sector in time”.

Developer Fabrizio Perilli, of construction company Perifa, welcomed the targets, but agreed high interest rates and collapsed subcontractors were an industry-wide problem.

“We are at a low point in terms of developing. The light switch doesn’t get turned on overnight,” he said.

“It is tough at the moment — construction costs are high, contribution costs and levies are high, the interest rate environment over the last two years has been tough as well.”

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