Housing completions in New South Wales are falling short of rising demand driven by population growth.
When studying the rate of new housing completions in proportion to population growth, NSW is lagging behind Victoria and Queensland, a Property Council analysis of figures from the Australian Bureau of Statistics has revealed.
The data indicates that in the year leading up to June 2017, 1.9 homes were completed per thousand residents in NSW, as opposed to 2.7 in Victoria and 2.4 in Queensland.
According to Property Council NSW’s executive director, Jane Fitzgerald, ramping up housing supply in the country’s most populous state is critical to easing housing affordability pressures.
“Boosting housing supply is critical to addressing housing affordability, yet currently, NSW is completing fewer houses per thousand people than both Victoria and Queensland, and this has been the case for the past 10 years, demonstrating long-term poor performance,” Ms Fitzgerald said.
“When we don’t build enough homes for our population, prices rise. Although the data shows NSW has been improving, the results show that our planning system cannot keep up with demand.”
Amid tightened lending conditions that have reduced investment activity in the residential market, Ms Fitzgerald believes that a rise in state development taxes will further stunt investment demand, reduce supply and increase property prices.
“Investment in residential housing will become less attractive in NSW due to an increase in development levies across the state. This will stunt supply and further slow completions, increasing house prices,” Ms Fitzgerald added.
The executive director called for the NSW government to reintroduce the Metropolitan Planning Program to strengthen oversight of the planning system, and she urged Premier Berejiklian to revise the state’s taxation arrangements.
"Premier Berejiklian’s top priority has been to address housing affordability, and a slow and inefficient planning system and increased levies are major hurdles that must be addressed if we are to make a dent in prices,” Ms Fitzgerald concluded.