NSW housing approvals plunge, sparking fears of a worsening crisis

NSW housing approvals have collapsed by 20 per cent in a single month, with experts warning the state now needs 7000 new homes every month to meet national targets.

Aerial drone view of The Ponds in the North West of Sydney, NSW. Picture: iStock

Industry leaders have voiced their concerns as latest housing approvals data shows the NSW pipeline in decline and no end to the crisis engulfing the state.

Urban Taskforce and the Property Council of Australia say ABS figures that saw dwelling approvals in NSW fall from 4669 in September to 3705 in October were a clear warning that the housing pipeline “is going backwards just as it needs to accelerate”.

Commenting on the final data set for the year, Urban Taskforce CEO Tom Forrest said: “A faltering housing pipeline will only put more upward pressure on housing costs, placing further costs of living pressures on those who can least afford it.

“We are entering a vicious cycle … which demands a response. Increased housing costs push inflation up. Higher inflation causes the RBA to lift interest rates.

Tom Forrest from the Urban Taskforce. Picture: Supplied

“Increased interest rates drive up construction cost and worsen new home affordability.”

Mr Forrest said NSW now needs to deliver around 7000 new homes each month to reach the numbers required under the National Housing Accord.

Property Council NSW Executive Director Anita Hugo also pointed to the significant progress NSW needs to make to meet those NHA commitments.

“A 20 per cent fall in approvals in one month, while other states are lifting or holding their ground, is exactly the opposite of what we need if we are serious about hitting our housing targets,” Ms Hugo said.

“Detached housing has only softened slightly. The real gap is in apartments and townhouses, which is where most of our growth and well-located density needs to come from.

“The Government has put a lot on the table, from transport-oriented development to the low and mid-rise housing policy, the new Housing Pattern Book for low and mid-rise apartments, and the welcome passage of the Planning System Reforms Bill.

“We hope to see these important reforms start to translate into more approvals more quickly.

“We are not short of strategies or zoned land on paper; however, we are short of projects that stack up.”

Originally published as NSW housing approvals plunge, sparking fears of a worsening crisis