New ABS data showed that NSW “faces a long road to recovery and on housing supply and affordability,” as the state’s planning system “has clearly failed with ongoing levels of dwelling completions and commencements,” said Tom Forrest, Urban Taskforce CEO.
The ABS data for the September quarter showed that only 12,490 dwellings commenced in NSW – that compares unfavourably to Victoria, which saw more than 14,094 commencements. The figure is also well down from the 17,000 to 20,000 quarterly commencements achieved in NSW 2016-18.
“These are the numbers that NSW needs to return to if it is to start to address the historical shortage in supply and have any meaningful impact on affordability,” Forrest said. “This poor end to 2022 on the ‘new starts’ data is bad news for hopes of a recovery in housing supply.”
A similar slump was shown in the ABS completions data, with only 12,699 completions (seasonally adjusted) reported in the NSW September quarter. That’s down from the 18,000-19,000 quarterly completions delivered during 2018-19. The figure was also not much higher than the total 15,244 new dwellings delivered in the same quarterly period by Victoria, a smaller state than NSW.
Forrest noted that another recent ABS data showed that new housing and apartment approvals had been chronically low since 2019.
“It should be of no surprise to anyone that this has resulted in a crisis in housing supply,” he said. “The sad thing is that it seems to be a complete surprise to many on the NSW planning system.”
The most immediate indicator of the crisis, Forrest said, is the rental supply disaster currently gripping the entire state.
“Now less than 10 weeks out from the state election day, the latest ABS data is a call to action to the government and the opposition to commit to strategies to turn around the creaking NSW Planning system,” he said.
“If the NSW Planning system is failing in terms of approvals – we will continue to see commencement and completion numbers continue to fall well below what is needed to turn the housing supply crisis around. We need the planning system to encourage investment in new housing, rather than doing [everything] possible to prevent supply.”
While federal and state government initiatives on housing supply are welcome, Forrest said “at present, 2023 looks set to see the affordability and rental crisis deteriorate in NSW.”
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