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Nearly 50,000 new homes could be constructed by 2029 if the government forgoes two taxes and turbocharges planning approval times, with major housing developments in the city’s west considered financially unviable, a new Property Council report claims.
Delivered by global real estate firm Savills on behalf of the Property Council, the 68-page Release the Pressure report argued two property taxes – new Sydney Water Development Servicing Plan (DSP) and Housing and Productivity Contribution (HPC) — were working against the government’s housing agenda.
Premier Chris Minns wants to fast-track higher-density development in Sydney.
Premier Chris Minns has committed NSW to delivering 377,000 new homes by July 2029 as part of the National Housing Accord, announcing a suite of housing reforms aimed at boosting anaemic housing supply across Sydney.
However, the Property Council report claimed government red tape was inhibiting delivery of housing in western Sydney. The council represents all property sectors, from design and construction to asset investment, management and development.
The suspension of new charges throughout the housing accord period and expediting planning assessment times could deliver around 16,000 new homes in Sydney’s suburbs west of Campbelltown and Penrith, known as the Western Parkland City, the report found. In the sliver between Sydney’s west and Parramatta, known as the Central River City, delaying the new taxes would contribute around 33,500 new homes.
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More than a third of housing costs in the Western Parkland City and 27 per cent in Central River City were made up of government taxes and charges, which included developer contributions and GST.
The report found the typical 250-unit apartment development, and a 115-lot greenfield development, would no longer be financially feasible in 2024, with the DSP and HPC charges increasing from a discounted 25 per cent rate this year to 100 per cent by 2026.
“There is no capacity to absorb new taxes and charges, with many new residential developments already unfeasible,” the report said.
