New dwelling approvals are declining across NSW and the State Government’s approach to tackle the issue is leading to a “perfect storm”, according to the real estate industry.
Australian Bureau of Statistics (ABS) data shows NSW dwelling approvals declined 10 per cent in June.
The 1597 private houses approved in June is the lowest recorded figure for NSW since January 2013, according to the ABS.
The total number of dwelling units approved in NSW fell 18.8 per cent in June 2024, including a 19 per cent fall in private houses.
Meanwhile, demand is at record high levels via immigration, which is seeing the NSW population increase more than 15,000 people each month.
Real Estate Institute of NSW (REINSW) Chief Executive Officer, Tim McKibbin, said the government needed to increase construction and stop damaging landlords through regulatory changes.
“Demand is rising fast and the supply gap is widening at an increasing rate,” Mr McKibbin said.
“These are perfect storm conditions, which must be reversed now.
“The data is screaming at government and it’s time it listened.”
Mr McKibbin said planning at council level needed to be streamlined and they should have to meet quotas or lose their ability to approve developments.
“In most areas, it takes longer to approve a new build than it does to build it,” he said.
“There’s something fundamentally wrong there.
“If they don’t meet a certain performance criteria they should lose their power and that should go to the state level.”
Mr McKibbin said that would dramatically speed up the approvals process and it would help with supply issues.
He said that changes to no-grounds evictions was likely to hurt investor sentiment and drive them out of housing.
“The government has to remember that a landlord is initially an investor,” he said.
“They don’t have to put their investment dollars in housing, they can put it in shares, fixed interest, offshore.
“If the government keeps going down this path of making it unattractive, the money will go elsewhere.”
Mr McKibbin said the State Government also needed to cut back on taxes.
“All three levels of government tax property,” he said.
“With a new property, at least 40 per cent of the cost is government taxes and charges.
“They talk affordability, but they act with taxes.”
Mr McKibbin said the Federal Government also needed to address immigration levels.
He said that there had been supply issues for 25 years and construction could not keep up.
“Even if we started from zero with no demand, it would only be a couple of months before we would be under stress again from the number of people coming in,” Mr McKibbin said.
He said the housing crisis was not easy to solve, but government needs to do better.
“It is a long-term prospect,” he said.
“But government can no longer turn a blind eye to the data.”
