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- Undersupply of homes in NSW will hit 100,000 dwellings by 2038 if it stays at current levels, according to the state’s Productivity Commission white paper
- Since 2006, NSW housing supply has not kept pace with demand or State targets, the report found, creating an accumulated housing shortage in the state
- “Undersupply is expected to continue and increase if we do not change the way we plan for housing,” the report said
- Local councils are directly responsible for most land use regulation affecting their local areas, and the report said they often have an incentive to resist change and infill development
- While empty-nesters might want to downsize, therefore freeing up housing for young families, stamp duty imposes a “significant acquisitions cost”, according to the report which endorsed a broad-based land tax instead
Undersupply of homes in NSW will hit 100,000 dwellings by 2038 if it stays at current levels, according to the state’s Productivity Commission white paper.
The 371-page report identified 60 opportunities to “to reboot productivity growth in New South Wales” and recommended several options to meet the states future housing needs.
Since 2006, NSW housing supply has not kept pace with demand or State targets, the report found, creating an accumulated housing shortage in the state.
“Undersupply is expected to continue and increase if we do not change the way we plan for housing,” the report said.
Property Council NSW executive director Jane Fitzgerald said the think tank’s white paper was an important post-COVID launchpad.
“This comprehensive list of recommendations includes some important boosters set to untie the knots in the planning system and speed up processes to deliver benefit to the economy and release the homes our state so desperately needs,” she said.
“Housing affordability is a dire challenge that is causing distress for people right across NSW and the White Paper rightly calls for local housing delivery processes to be scrutinised and for the State to step up to ensure a strong pipeline of housing,” Fitzgerald continued.
The report said restrictions on the density of development reduce supply where constraints are binding, where developed would like to build more, typically in the inner suburbs.
Local councils are directly responsible for most land use regulation affecting their local areas, and the report said they often have an incentive to resist change and infill development.
“Even a small group of vocal opponents can make it politically challenging for councils to accept development,” the report noted.
“The aim of setting housing targets for councils is to overcome that barrier and ensure we plan for housing where it will be most valued, not just where there is the least resistance (or none at all). Community concerns should not be disregarded, but they should be considered within the context that more housing will benefit society at large.”
The report also placed some of the supply issues on stamp duty, which it said is limiting mobility in the market.
While empty-nesters might want to downsize, therefore freeing up housing for young families, stamp duty imposes a “significant acquisitions cost”, according to the report which endorsed a broad-based land tax instead.
“Both families may end up staying put, even though each is in a home that would suit the other better,” the report explained.
The report also noted a substantial increase in young adults living with their parents, rising to 32.4 per cent in 2018, with unaffordable housing a key reason young adults are staying at home for longer.
NSW Treasurer Dominic Perrottet said they “will carefully consider the ideas in this report and our collective challenge is to debate these opportunities, identify those that we should proceed with, and then find practical pathways that lead to a better New South Wales as a result”.
