The U-turn on Sydney’s housing crisis no one saw coming

As far as new year’s resolutions went, no one saw this coming. Could it be that in 2025, an opposition party in NSW takes the unprecedented step of vowing to throw political sparring and point-scoring out the window and work with the government of the day to solve a seemingly impenetrable problem? In the very state that views politics as a blood sport?

We all make January 1 resolutions with the best intentions and a keenness to right the wrongs of the past year. Too much wine? Quit alcohol. Too much snacking? Cut out carbs. Save more, spend less. And on it goes. Political parties and their leaders, however, are much less likely to commit to unachievable undertakings, lest they be held to account.

NSW is falling way short of its home-building targets. Credit: Louie Douvis

Yet, as a new year ticked over, NSW remains a long way from solving its housing crisis. And the Coalition, led by the usually risk-averse Liberal Mark Speakman, has decided to dramatically change tack. In a stunning new year’s resolution, the Coalition has declared it will work with Labor to find a fix for the state’s biggest problem in a generation.

After deeming that a 45-year-old piece of planning legislation is holding back NSW, Speakman and his Nationals’ offsider Dugald Saunders have written to Chris Minns, politely suggesting the premier hold a “bipartisan roundtable” to discuss housing, and with it an overhaul of the planning system, including that legislation.

“The people of our state expect and are entitled to expect their leadership to rise above politics,” Speakman’s letter began, “and to deliver real solutions that address housing affordability and availability. We extend an offer to work with you to tackle this issue head-on.”

Minns, who can read politics better than anyone in Macquarie Street, is open to Speakman’s idea.

It is a vast turnaround from mid-2024, when the Coalition was trying to pass legislation to kill off NSW Labor’s signature housing reform. The Coalition would have sought to stop development around 37 train stations, a key plank in Minns’ promise to build up, not out. It was a foolish move, not least because the opposition had no credible alternative solution.

This is not to suggest an opposition should not run a critical eye over every plan a government hatches. That is its job. However, opposition for opposition’s sake is a futile exercise when it involves an issue that is universally seen as the state’s great challenge. The Coalition’s cause was not helped by Liberal NIMBY-in-chief Alister Henskens, who believes his leafy enclave of Wahroonga should be spared the indignity of housing more people.

Henskens, who sees himself as a leadership threat to Speakman, hosts his own podcast called Macquarie Street Matters. In one episode last year, with opposition planning spokesman Scott Farlow as his guest, Henskens was defending the state’s Environmental Planning and Assessment Act. His comments were not intended to be satire.

“Our planning system has been in place since 1979,” Henskens told his listeners. “If that was the cause of the current issues with supply and affordability, then they would have presented themselves back in 1979, not much more recently.” (Note to Henskens: Sydney’s population in 1979 was 3.2 million. It is now 5 million. The median house price in Sydney in 1979 was about $57,000. Last year it was $1.4 million.)

Regardless of the flip-flopping from the opposition on housing, the Minns Labor government will start 2025 on the back foot. It signed on to the National Housing Accord, committing to building 75,000 homes a year for the next five years. The latest housing approval data shows just how far NSW is from reaching that ambitious target.

The total number of houses and units approved in NSW in the 12 months to November 2024 was 42,109. That is almost 33,000 short in one year alone. The Urban Taskforce has ominously described the falling approvals as “a chronic trend in the wrong direction”. Compare this with 2015, when the number of dwellings approved was 70,884, and NSW seems destined for failure.

Minns also faces big hurdles when it comes to infrastructure to support his housing plans. An example is on Sydney’s lower north shore. A comprehensive high school at Crows Nest opened just 10 years ago but is full and sending students to Mosman High. At the same time, Crows Nest has been earmarked for 3255 new homes.

To his credit, the premier has never shied away from acknowledging the enormity of the challenge. Minns has been open about the likelihood of NSW missing its housing targets. Now it is up to the opposition to show it has the willpower to stick to its new year’s resolution and work with – not against – its political foes.

Alexandra Smith is state political editor.

Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.