A 13 per cent fall in NSW housing completions underlines the size of the problem facing the state’s newly elected Labor government, according to a peak industry body.
ABS data released this week showed completions in NSW fell to less than 11,000 in the December quarter.
Nationally, total home commencements fell 6.7 per cent to 41,374 homes.
New private sector house commencements fell 2.3 per cent to 28,330 and new private sector other residential commencements fell 16.5 per cent to 12,053.
The value of building work done during the quarter was down 1.1 per cent on the previous quarter to $30.7 billion.
The fall was driven by non-residential building work done, which fell 3.3 per cent to $12.3 billion and follows a rise of 3.6 per cent in the September quarter.
“The ABS data recorded a low-ball 12,583 completions in NSW in the September 2022 quarter. For the December quarter, it was only 10,931,” Urban Taskforce chief executive Tom Forrest said.
New housing commencements in NSW also went backwards in the December quarter, down from 11,784 in September 2022 to 11,397 in December 2022.
“Of concern is the extent to which the housing supply pipeline is drying up,” Forrest said.
“The same period last year—the December quarter ending December 2021—had 13,365 new home commencements and that quarter was impacted by the spread of the Covd.
“The data shows that this year saw a drop in commencements of 15 per cent.”
Forrest said that clearly interest rate rises have had an impact on new commencements.
“But also critical has been the malaise in the NSW planning system which failed to get ahead of the game during Covid by having approvals ready to be activated as soon as the recovery from the pandemic came through,” he said.
“Instead of hitting the accelerator on planning assessments during Covid, the data shows that the system went into a deep sleep.
“It all points to a long road to recovery on housing supply and no end in sight for the housing supply and rental affordability crisis which looks set to deteriorate over the course of the next 12 to 18 months.”
The newly elected Minns government in NSW “has a clear mandate for significant planning reform”, Forrest said, and Premier Chris Minns had been up-front in recognising that housing supply is a critical challenge.
“You don’t get housing supply without housing approvals and herein lies the first cause of the crisis we currently face,” Forrest said.
“Now, more than ever, we need incentives for the private sector, who will need to build 96 per cent of our future housing stock, to deliver the housing that a growing NSW needs.
“With NSW expecting to house an additional 200,000 migrants during this financial year and the next, urgent action of housing is required.”
