Sydney is facing a shortage of Greenfield land. Photo: Peter Rae

Industry roasts NSW government over land shortage

Martin Kelly|Jun 18, 2021

The Greater Sydney Megaregion is facing a severe shortage of greenfield land that will blow out to an undersupply of more than 25,600 sites by the 2030 financial year unless the NSW government changes its approach, a new report from the Urban Development Institute of Australia reveals.

UDIA (NSW) president Stephen McMahon has called for an end to the bureaucratic “backflipping” that is resulting in “inexcusable” planning delays of eight years in some cases.

He said the existing multi-department approach is not working and has resulted in chronic undersupply of land, forcing up prices for new homes in some greenfield areas by up 45 per cent this year.

Mr McMahon told attendees at a UDIA lunch in Sydney on Thursday, attended by Planning Minister Rob Stokes, it “beggars belief” that key decisions must be signed off by up to nine different government agencies.

“A lot of you will be familiar with a lot of the backflipping that goes on in some of the agencies in terms of their decisions. It’s incredibly difficult to work around that,” Mr McMahon said.

He welcomed an announcement from Mr Stokes that zoning will be fast-tracked in south-west Sydney, potentially resulting in 18,000 new lots, but said it would not make much of a difference.

“It was a relatively good start [but] the impact it will have is probably relatively minor,” said Mr McMahon.

Mr Stokes told attendees he agreed with a key UDIA recommendation that government takes a co-ordinated high-level approach to ensure land supply across Sydney, the Hunter region, Central Coast and Illawarra-Shoalhaven keeps up with demand.

“Given the urgent need to address the housing supply issues across our State, there will now be a regular standing item on agenda for the Delivery and Performance Committee (DAPCO), which is a cabinet sub-committee,” Mr Stokes said

The UDIA (NSW) report estimated that demand for new homes across the Greater Sydney Megaregion will run at around 14,000 a year through to mid-2029

But supply is already lagging by several thousand a year, the report said, and is forecast to reach 25,600 greenfield lots by the end of the decade if the government does nothing to improve its processes.

A major reason for the shortfall is slow delivery of sewer and water infrastructure, an area the report said needs to be addressed.

“Given the very strong demand for lower density product after COVID-19 and the significant decline of multi-units supply, there will be the possibility of much more demand for greenfield housing over the next two to three years,” the report said.

“This is a serious challenge, meaning a business as usual approach will be devastating for our future as housing becomes increasingly unaffordable, ultimately with the potential to create an enormous burden on taxpayer-funded housing.”