The Minister for Planning and Public Spaces Rob Stokes made the announcement at an Urban Development Industry Association (UDIA) luncheon, and said that the government’s current focus is on creating new “greenfield” housing supply.
Mr Stokes said the taskforce would report back by September 2021 on how the NSW government could better utilise the planning system and other levers to increase supply.
The NSW government also announced that more than 18,000 new homes have been earmarked for immediate rezoning in Sydney’s south-west in a bid to boost housing supply in NSW.
Thousands of dwellings have been rezoned in the Glenfield Precinct, Lowes Creek Maryland, Leppington 2 and 5, and Wilton Town Centre Precinct, along with playing fields, open spaces, primary and high schools, parks, environmental conservation land, and employment land that could support jobs, the government said.
Commenting on the focus on increasing housing supply, Mr Stokes said: “It’s clear that as a result of the pandemic, demand for greenfield housing has increased even more than anticipated, so we are responding with new housing in some of Sydney’s best growth areas, the south-west and the Macarthur.
“This is why I am setting up a regional housing taskforce to report back by September on how we can better use the planning system and other levers to boost supply.”
Speaking about the new taskforce, Deputy Premier John Barilaro said that a new approach was required to support regional residents with new housing supply and “make regional towns a magnet for people coming from the city centres”.
“From Byron to Bega and Coffs Harbour to Dubbo, regional towns are booming, but in many parts of the state, planning has not kept pace with growing demand,” Mr Barilaro said.
“Regional housing markets are complex and unique, and there could be a whole range of factors driving housing constraints, and we need to unpack those so we can deliver new housing opportunities for our regional communities.”
Budget predicts house price growth peak in 2021
The NSW government has released its budget for 2021-22, in which it has predicted that annual house price growth would peak around late 2021.
The budget papers said: “As higher prices encourage more owners to sell, this will work to limit house price growth over time. In addition, higher prices are expected to price out more potential buyers, weighing on demand.”
The budget papers also predicted that macro-prudential tightening by regulators in response to growing house prices is unlikely because of the concentration of lending growth in owner-occupier loans (rather than investors).
The NSW government noted that speculation has emerged around the potential for macro-prudential tightening by regulators in response to growing house prices.
“A major intervention would prompt a downward revision to house prices from baseline, with broad implications for the economic outlook.”
It added that residential construction is expected to remain strong in the very near term, “fuelled” by higher house prices, ongoing fiscal and monetary policy support, and low interest rates.
NSW households lodged over 23,000 applications for the HomeBuilder grants, of which more than 16,000 were for new dwellings (equivalent to around 32 per cent of all building approvals in 2019), according to the budget papers.
It also said that demand for renovations is expected to drop off in 2022 as discretionary household spending is redirected back towards international travel once the border reopens, while housing activity is expected to ease once the temporary boost to housing construction and renovation activity from the HomeBuilder scheme fades.
Business investment in aggregate is expected to contribute to economic growth over 2021-22, but the end of tax incentives beyond that period could constrain investment growth after 2022-23, the government said.
However, it added that this is expected to be “more than offset” by the improvement in economic conditions.
Funds allocated for social and affordable housing
The NSW 2021-22 budget includes $852.5 million capital expenditure in 2021-22 to deliver social and affordable housing and capital upgrades across NSW through the NSW Land and Housing Corporation (LAHC) and Aboriginal Housing Office (AHO).
According to the budget papers, this has continued the government’s $812.0 million COVID-19 social housing stimulus package announced in 2020, including $366.5 million in 2021-22.
The government said that it expects this package to deliver over 800 new houses and upgrades to around 16,500 existing properties across the LAHC, AHO, and community housing portfolios across 2020-21 and 2021-22, along with accelerating housing estate redevelopments, which would contribute to the delivery of over 500 new social housing dwellings and 1,000 new land lots for sale to build private homes.
It said that this is in addition to the government’s $1.1 billion Social and Affordable Housing Fund (SAHF).
The government has also announced the expansion of the $57 million Together Home program through the Department of Communities and Justice, which it said would provide support trough additional leasing and wrap-around services for 250 households for two years and support another 100 dwellings in the community housing provider sector.
The NSW government has also outlined new and existing measures for Aboriginal communities in the 2021-22 budget, including $259.6 million over four years (and $156.3 million in 2021-22) to deliver new and upgraded social and affordable housing for Aboriginal communities across major regional and metropolitan locations.
It has also allocated $52.4 million in 2021-22 towards the Aboriginal Community Housing Investment Fund.
The budget papers also noted that the NSW government released a consultation paper in November 2020, outlining a proposal for a phased transition away from stamp duty for people buying a property, who would instead be able to choose between paying a large amount of stamp duty (and land tax where applicable) or a small annual property tax based on unimproved land value.
The government said in the budget papers that over time, the reform – which is particularly aimed at first home ownership – could improve housing affordability, increase home ownership by 6 per cent, increase average household income by around $3,300 and create 70,000 additional jobs.
The government released a property tax progress paper on 11 June 2021 outlining the findings of the consultation and providing more information on topics frequently raised through consultation.
“The government is committed to putting forward the best possible model to create the most effective tax system for the people of New South Wales,” the budget paper said.
“Comments on the progress paper received before 30 July 2021 will help to inform the government as it considers its next steps for property tax reform.”
Furthermore, the government has announced incentives to increase the take-up of electric vehicles, with a $489.5 million package that would phase out vehicle stamp duty on zero and low emission vehicles and gradually phases in a distance-based road user charge.
In his budget speech, NSW Treasurer Dominic Perrottet said: “We’re progressing our property tax proposal, because we know housing affordability is the challenge of a generation, and we want young people to get a foot in the door.
“Today we introduce legislation to reform infrastructure contributions, and it will unlock housing supply faster and more efficiently, and make homes more available and affordable.”
“We’re advancing reforms to deliver a more streamlined planning system, to get more houses built faster and more affordably.”
[Related: New FHLDS price caps welcomed]
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.