Infrastructure investment drives second wave of residential development in Parramatta CBD
PARRAMATTA CBD’s apartment market is cooling but should boom again in as few as two years, says real estate leader David Hagger, who predicts big developers will then come flooding back to the geographic heart of Sydney.
Parramatta
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THE inaugural Parramatta Crane Survey shows the city’s apartment market may be cooling but it won’t crash — and it should boom again in as little as two years.
Deloitte’s self-driven survey looked to see if the city was producing an oversupply of apartments at a time when Parramatta Council is delivering an average of 3514 dwellings a year to 156,969 by 2036.
Author David Hagger, who is Delotte’s Western Sydney real estate leader, finds apartment supply is “actually well balanced” in Parramatta, the geographic heart of Sydney.
“There’s always been the doomsday predictions that the housing market will crash but at the moment it seems to be settling rather than crashing,” Mr Hagger said. “If you’ve bought an apartment off the plan two or three years ago and are about to settle, you can be pretty confident the value will hold because of all the projects happening in the city.
“The infrastructure development — including the influx of jobs from NAB and the government departments re-locating into Parramatta — will bring a second wave of residential developments in about two to three years.”
The NSW Department of Planning has forecast Parramatta City will be the biggest supplier of Greater Sydney housing stock to 2021-22 with 22,250 new dwellings and the Crane Curvey reveals an unprecedented level of construction in Parramatta, identifying 39 developments.
Among them is the 22-storey $45 million Charlie Parker property in Harris Park – aptly named by the two streets it is positioned on, Charles and Parkes Streets — which is expected to deliver 111 designer apartments by the end of 2019.
Inspired by the art-deco era, the visually impactful Charlie Parker building is the brainchild of award-winning architects Francis-Jones Morehen Thorp (fjmt).
“We were interested in creating a sculptural form for the building that included many curves, including a curved rooftop,” Johnathan Redman, fjmt’s principal, said. He said the design represents a fusion of Parramatta’s CBD and the Harris Park environment.
Chris Johnson of the Urban Taskforce, a group representing property developers, said building apartments was “the best way to accommodate growth. And a lot of people, especially the younger generation, are keen about a cosmopolitan, buzzy style of inner-city living”.
The Crane Survey shows there are 2707 apartments under construction in Parramatta CBD, due for completion between 2018 and 2019. A further 4865 apartments are proposed across 12 projects and represent potential supply from 2020 onwards.
“There are only 1110 apartments with development application (DA) approval in the pipeline, providing a short-term supply of approximately two to three years, indicating lower risk of oversupply,” Mr Hagger said.
“Developers are adjusting to changing market conditions— including limits on lending by banks, increases in stamp duty and land taxes and restrictions by Chinese regulators on outbound investments in real estate to name a few — and also note a clear shift towards commercial development.”
RESIDENTIAL APARTMENTS BY STATUS
Parramatta Council is currently the ninth-fastest council in Greater Sydney to turn around DAs in 2017, averaging 76 days, down from 81 days in 2016. It approved 1202 DAs last year.
Wollondilly is first, averaging 29 days and Cumberland — formed from the merger of parts of Auburn, Parramatta (Woodville ward) and Holroyd councils — is last at 125 days.
“Mum and dad” developers in Parramatta City saw residential development applications being approved in an even faster 56 days.
“The size and quality of the developments we’ve seen has been increasing,” Mr Hagger said.
“The (commercial) tenants don’t start moving in (to Parramatta) realistically until 2019 to 2020. Then there will be opportunities for the developers to react.”
Cumberland Council’s acting general manager Hamish McNulty said: “Since May 2016 the new council has established a ‘Fast Track’ assessment team for housing approvals, directed greater resources into council’s development advisory services unit to assist ‘mum and dad’ developers and streamlined internal assessment processes with standardised reporting, significantly reducing wait times.”
Mr McNulty said Cumberland Council was on track to meet the NSW Government’s target of approving 90 per cent of housing approvals within 40 days by 2019.
But the Western Sydney director of the Sydney Business Chamber, David Borger, thinks all councils can do better. He wants council staff to turn to France for decision making inspiration and employ a charrette process, “where you get a group of people together that are forced to make a decision in a short space of time”.
The youngest person to hold the office of Lord Mayor of Parramatta where he served for three terms, elaborated: “The team meets. They can spend a few hours on it if they want to. If they need information they can ask for it. But they’re forced to make a decision and that would radically reduce the DA processing time.
“This particular innovation ... doesn’t necessarily require additional resources because all of those individual people — there could be six, seven or eight people in a team — they’ve all got to individually read the DA and provide their own separate advice anyway.
“The difference is that they will all be doing it on the one day, rather than at different times.”
The Property Council of Australia’s NSW executive director, Jane Fitzgerald, said: “Time is cost, cost that gets added to the ledger and someone has to pay at the end of the day.” Either developers walk away from projects considered “too costly or too hard”, or they pass on the costs to the new home buyers, she said.
The comments come as all councils in Greater Sydney and Wollongong are stripped of their power to make decisions on any DAs valued over $5 million from March 1, after NSW Planning and Housing Minister Anthony Roberts introduced legislation “to end the dodgy and dirty backroom deals that have gone on for far too long inside local councils”.
Independent Hearing Assessment Panels (IHAPs), consisting of three experts approved by the planning minister and one council-appointed community member, will decide on all DAs above $5 million. And councillors will make no DA decisions, even though statewide they made only about two per cent.
Local Government NSW president Linda Scott saidratepayers would foot the yearly bill of operating an IHAP, estimated by the government as around $100,000.
The department of planning’s spokesman said: “Councils may find these costs are offset through savings on legal costs from reviews and appeals.”
Mr Johnson, a former NSW Government architect building master plans for iconic structures such as Sydney Olympic Park, said big big projects contribute “quite a lot of funding back to the very infrastructure that people say is needed”.
From May 12, 2016 — when the City of Parramatta was proclaimed by the State
Government — until June 30, 2017, Parramatta Council received $36,288,000 in Section 94
income from developments, which it uses towards community infrastructure.
“We typically calculate S94 on a financial year basis, however, for last year (ie 2017 calendar year) Cumberland Council received approximately $29 million in S94 contributions,” Cumberland Council’s Mr McNulty said.
The introduction of the new IHAPs follows the appointment of Sarah Labone as the Complaint Assessment and Administration Officer for the City of Parramatta, Cumberland and the Inner West.
Parramatta Lord Mayor Andrew Wilson said the shared internal ombudsman service will act as an impartial watchdog over council’s activities by conducting independent investigations and reviews into administrative processes and services provided by member councils.
Five of the 180 complaints about the handling of a DA made to the Office of Local Government in 2016-17 were about Parramatta Council. Three were against Ryde.
DA LEADERBOARD (average approval times)
1. Wollondilly (29 days)
2. Camden, Campbelltown, Hawkesbury (39 days)
3. Canterbury-Bankstown (42 days)
4. Northern Beaches, Randwick, Waverley (52 days)
5. North Sydney (57 days)
6. The Hills (62 days)
7. Bayside (64 days)
8. Hornsby (65 days)
9. Parramatta (76 days)
10. City of Sydney, Ku-ring-gai, Mosman (78 days)
11. Inner West, Penrith (79 days)
12. Blue Mountains (85 days)
13. Ryde (89 days)
14. Willoughby (90 days)
15. Woollahra (112 days)
16. Cumberland (125 days)
* Fairfield (25 days), Blacktown (39), Liverpool (47), Lane Cove (50)
Note: Council performance is based on the average number of days it took for approving DAs in 2016/17. * Fairfield, Blacktown, Liverpool and Lane Cove Council’s data is for 2015-16.
‘IHAPs will free local councils to focus its efforts on strategic leadership’
GARY White, the state’s chief planner, reasoned there is no reason for local councillors to get “cornered and lampooned” over individual developments.
Mr White, who helped lift southeast Queensland city Ipswich out of the doldrums before becoming the NSW Chief Planner in late 2015, said: “One of the things about IHAPs is to say to planning authorities, ‘look, concentrate on telling that story of what you want to see happen in your backyard; tell the strategic story and allow the technical side of the assessment to be assessed by experts and individuals’.
“The one really important learning I got from doing the strategic plan for southeast Queensland was the importance of putting the infrastructure planning framework beside and parallel to the land-use framework.”
The Property Council of Australia’s NSW executive director, Jane Fitzgerald, agrees with the government that the IHAPs will free local councils to focus its efforts on strategic leadership.
“The former planning minister Rob Stokes would say often, and I think he’s right, that what most people want, like the average punter, wants to know is: what the rules are in relation to planning, whose applying the rules, and that the decisions are going to be taken in accordance with those rules in a reasonably transparent and fair way,” Ms Figerald, who is a former chief executive officer of the Royal Commission into Trade Union Governance and Corruption, said.
“So if their elected councillors set the rules, the experts (IHAP members) make the decisions, and there’s no brown paper bags full of money that cause problems in that process, and the process is fair and transparent, that’s a great conceptual framework. Now, having said all of that, resourcing is quite a separate issue.”
But an expert town planner, who attended a briefing by the NSW Planning Department last week on the change, said there would be “teething problems” with the new IHAPs.
“There’s no perfect system, but it’s clear there are already problems with it based on what we were told at the briefing to a couple of hundred planners, lawyers and the odd politician,” John McFadden, who is one of 218 experts in a pool to sit on the new IHAPs, said.
“Community representatives are being brought in from outside some LGAs because of the lack of applicants.” Blacktown has readvertised its position due to poorly qualified applicants and too many from Ward 1.
Mr McFadden said the IHAPs were a different system, but it was important to remember most DAs — everything valued at less than $5 million — would still be determined by councils.
“It’s important they continue to simplify their systems for the mums and dads who just want a new patio,” he said.
Local Government NSW’s Ms Scott said: “Given most buildings last over 100 years, it is important development is not rushed to ensure it is in the public interest.
“DAs for well-designed developments that meet the local planning rules are always going to be resolved more quickly than DAs that don’t, or that are particularly complex; that’s just common sense.
“But there are ways to streamline the process: pre-DA meetings between developers and councils can help iron out problems ahead of time, and the e-lodgement process is a good one.”
A SIMPLE GUIDE TO DEVELOPMENT APPLICATIONS
Click here for the State Government’s ‘5 stages to faster, more efficient assessments’
Local government (council)
■ Minor, low-impact home, shop or business improvement projects, known as “exempt development” or “complying development”, don’t require planning or building approval. Other developments need consent and a form must be lodged with your local council, alongside a development application.
■ City planning officers determine the majority of DAs under delegated authority of council.
■ Across NSW, council staff currently make about 69 per cent of all DA and complying development certificate determinations. Councillors were making about two per cent of the DA decisions but from March 1 they will make none.
■ The fees for DAs are mandated under the Environmental Planning and Assessment Regulation 2000, and range from $110 for developments up to $5,000 to $15,875 for developments over $10 million (plus an extra $1.19 for each $1,000 or part of $1,000 by which the estimated cost exceeds $10 million).
■ Many NSW councils offer an online application tracking service.
■ Complaints about the general administrative conduct of councils, councillors and council staff can be made to the Office of Local Governmentor the NSW Ombudsman, while complaints about alleged corrupt conduct of councillors or council staff can be made to the Independent Commission Against Corruption (ICAC).
Independent Hearing and Assessment Panel
■ DAs with a dollar value of over $5 million but under $30 million to go before a mandatory Independent Hearing and Assessment Panel, known as an IHAP, from March 1.
■ IHAPS also deal with:
● DAs where the applicant or owner is the council, a councillor, councillor’s family member, council staff member, or a state or federal MP;
● DAs that get 10 or more objections;
● DAs accompanied by a voluntary planning agreement;
● DAs seeking to depart by more than 10 per cent from a development standard; and
● applications associated with a higher risk of corruption (that is, residential flat buildings assessed under SEPP 65 and demolition of heritage items).
■ All meetings are open to the public and will be recorded and made publicly available.
■ All IHAPs will have: a chair approved by the minister for planning with expertise in law or government and public administration (casting vote), two independent experts chosen by the local council from a pool approved by the minister, and one council-appointed community member who represents the council ward in which the development is to take place.
Sydney Planning Panels
■ Five independent Sydney Planning Panels make decisions about significant
development proposals in their region.
■ Currently, the projects they assess are valued over $20 million but from March 1 that threshold will be increased to $30 million.
■ The panels also act as the relevant planning authority in some decisions when directed by the Minister for Planning or the Greater Sydney Commission, undertake rezoning reviews, and provide advice on planning and development matters when requested.
■ New planning panel chairs are: Carl Scully (Sydney Eastern City Planning Panel), Justin Doyle (Sydney Western City Planning Panel), Professor Helen Lochhead (Sydney South Planning Panel, which covers Canterbury-Bankstown Council), and Peter Debnam (Sydney North Planning Panel). The new chair of the Sydney Central Planning Panel is in the final stages of appointment.
