The New South Wales (NSW) Housing Monitor has posted record housing completions for metropolitan Sydney, but housing approvals in the city are declining at faster pace, according to industry group the Urban Taskforce.
The total number of Sydney’s record housing completions in the year to September 2018 was 44,315, which is well above the average annual target of 36,250
Urban Taskforce CEO Chris Johnson shared that this was a significant improvement for the city, which had lower figures in recent years.
“Two years ago in September 2016, the annual completions were as low as 30,580 so the providers of new housing have driven a great uplift,” he said.
However, Greater Sydney’s housing approvals were down to 48,435 in September 2018 year to date, compared to the 59,499 approvals in the year up to September 2016.
Johnson commented that there is a two-year lag between housing approvals and completions since a lot of the projects are large apartment buildings.
The current sales market for new homes in Sydney also decreased due to the difficulty in getting finances from banks following the Royal Commission into the banking industry.
“The tightening of purchases by off shore investors as well as the anti-development attitude across Sydney in the lead up to the NSW election in March 2019 has reduced confidence in new housing significantly particularly for the apartment market. Pre sales for new apartments have slowed down significantly,” said Johnson.
The Urban Taskforce is wary of the possibility that many of the approved homes over recent months will not be constructed in the current climate. This will result in a housing completions slump in a year’s time.
“While the planning system can give approvals, there are other constraints that are leading to a hold on projects proceeding to construction as their feasibility has changed significantly,” Johnson said.
“After the March election the NSW Government will need to bring new policies into place to boost housing supply so that target numbers are met and the 300,000 direct jobs in NSW in residential development are not undermined.”
