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{{propApi.successMessage}} {{region}} Change locationFeasibility constraints need to be addressed to combat housing supply shortages
Feasibility constraints need to be addressed to combat housing supply shortages
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“HIA Members stated that less than 2% of potential land development sites are actually feasible at present. It is a similar situation in the multi-unit sector where development costs often exceed the market price of an apartment. The Forum heard that around 75% of approved apartment projects never get out of the ground.
“In his address, the NSW Shadow Treasurer, the Hon Scott Farlow MLC acknowledged in the areas where housing is needed most, it is just not feasible to build.
“HIA Senior Economist Maurice Tapang told the Forum that whilst housing starts in NSW are increasing marginally, supply is well below the numbers needed to meet demand.
“Taxes, fees and charges continue to be a major barrier to new housing. In Western Sydney, the local council infrastructure contributions, Sydney Water development servicing charges and the Housing and Productivity Contribution alone add over $120,000 to the cost of building a new home,” added Mr Armitage.
“The limited supply of available land was also identified as a contributing factor with the cost of land rising six times faster than construction costs.
“In the 1970’s, Gough Whitlam talked about land supply being a major barrier to new housing. Here we are more than 50 years later still facing the same issues.
“Whilst planning reforms have been a good first step, if we are going to truly combat housing supply shortages, then the focus must now turn to tackling the feasibility challenges,” concluded Mr Armitage.
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HIA will continue to update you as we receive further advice and information on the ongoing transition from Domestic Building Insurance (DBI) to the First Resort Home Warranty Scheme (FRHWS).
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