Developers warn not enough NSW government investment to fix Sydney housing crisis
The state’s major housing bodies have warned the Minns government that if they do not invest more in enabling infrastructure such as sewage and water connections NSW will continue to fall far short of its housing targets.
NSW
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The state’s major housing bodies have warned the Minns government that if they do not invest more in enabling infrastructure such as sewage and water connections and reduce the financial risk for developers building new homes in the state budget next month, NSW will continue to fall far short of its housing targets.
Housing body, Urban Development Institute of Australia (UDIA) has called on the government in its pre-budget submission to invest more government money in speeding up enabling infrastructure such as energy connections which is delaying new builds, especially stand-alone homes.
Currently property developers pay a Housing and Productivity Contribution which goes towards the connection of vital infrastructure to homes, a fee that is then passed on to the buyer.
UDIA NSW chief executive Stuart Ayres said a lack of additional government funding meant much of the infrastructure was delayed, while the fees themselves often made building news homes for developers unfeasible, reducing the profit at which the homes could be sold for.
The UDIA’s submission has called for a deferral in when the infrastructure contribution fees are paid, suggesting more homes would be built should developers be able to pay the fees once a new home has been purchased. Currently fees are paid after development applications are approved, increasing the financial risk to the builder. The government would initially boost the enabling infrastructure with its own investment as the contributions come through.
“Development feasibilities have never been more challenged, but we know there are
feasible projects in the market that just need basic enabling infrastructure to start,” Mr Ayres said.
“It’s time for the Premier and Treasurer to double down on the supply side of housing.
Homes need infrastructure, without it they simply won’t be built.”
This comes after The Daily Telegraph reported that Housing Industry Association will seek a reduction of infrastructure contributions in its pre-budget submission.
Premier Chris Minns on Monday indicated reducing the fees was not on the table. He said he believed rezoning and a potential reduction in interest rates would go some way to increasing project feasibility.
“If we don’t take developer contributions for part of the money that is required to build infrastructure, it’s just going to come from every other taxpayer,” he said.
“If we can get a good share of the GST distribution from the Commonwealth government that mean we can put federal government subsidies into infrastructure projects.”
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Originally published as Developers warn not enough NSW government investment to fix Sydney housing crisis
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