In just the last month:

  • Gladys Berejiklian resigned (soon followed by Deputy Premier John Barilaro, the Minister for Transport, Andrew Constance and the former leader of the NSW Opposition, Jodie Mackay)
  • Dominic Perrottet is elected by his colleagues 39 to 5 to be the Premier of NSW. It is note-worthy that the NSW Minister for Planning, Rob Stokes, secured only 5 votes (presumably including his own) in the Liberal party-room ballot
  • Jim Betts, the former Secretary of the Department of Planning Industry and Environment (DPIE) and Secretary of the Department of Premier and Cabinet (DPC) designate, was sacked by the new Premier before taking up his post. Jim Betts no longer with the NSW public service
  • Michael Coutts-Trotter (MCT) is appointed Secretary of NSW DPC
  • Minister Stokes is sworn in by the Governor as the Minister for Transport in anticipation of a more substantial ministerial reshuffle in December after Parliament has risen for 2021
  • Premier Perrottet takes welcome but modest steps to fast track the re-opening of NSW, relegating Dr Kerry Chant from dictator to contributor to Government decision making
  • Dominic Perrottet publicly calls for a rapid return to pre-Covid levels of immigration, calling for a “big Australia immigration policy” to restore economic growth
  • The “Falinski Inquiry” (Commonwealth Parliamentary Standing Committee on Tax and Revenue) Inquiry has begun its public examination of housing supply and affordability
  • Kiersten Fishburn has been confirmed in the role of Secretary, DPIE
  • The Minister for Planning has published a flurry of media releases relating to housing supply and announcing the rezoning of land for development (though many of these are years if not decades away from actually delivering any housing supply) and all are subject to the dogs’ breakfast that is our infrastructure contributions system and the stalled plans for reform
  • The language and tone of Government has moved from “Covid Crisis” to “economic recovery and freedom”.

In the meantime, there has been some good news for DPIE and for the NSW housing market.  New housing approvals across all of NSW rose to 6,116 for the month of September, 2021.  This represents a 27% increase of the prior month.  But to be statistically relevant, this improved performance must be repeated regularly and still sits below the approvals needed to meet projected demand for housing. Under the new leadership of Kiersten Fishburn, we have hope for step-change improvements in the NSW Planning system.

DPIE are now working to develop reports using the e-Planning IT platform which should give real time (or close to it) updates on approvals of various categories in each LGA, District and Region.  This is welcome news indeed.

After more than two years of denying a housing approval and housing supply crisis; the resignation of a Premier; the election of the man responsible for the Productivity Commission’s damming assessment of their performance; the summary termination of the employment of their former leader, DPIE’s tune is starting to change.

Consistent with Premier Perrottet’s call for a rapid increase in migrant numbers, the Commonwealth Budget forward estimates are predicated on a rapid return of migrants to our shores.  In fact, they reply on not only returning to the pre-COVID-19 numbers of 160,000 per year (Net overseas Migration), but actually rely on an increase to 225,000 per year within 4 years.  `When this is combined with locally produced population growth, Greater Sydney will need to consistently produce circa 45,000 new dwellings per year just to satisfy this increased demand.

This NSW Intergenerational Report, produced by the NSW Treasury under the leadership of Dominic Perrottet, predicted that NSW would need an average of 42,500 new homes each year to meet demand just for Greater Sydney.  But this was based on a lower estimate of immigration.

While the NSW Government submission to the Falinski Inquiry into housing supply and affordability (clearly written under “former management”) acknowledges that housing supply has been a contributor to the Housing Affordability crisis, the recommendations represent an effort to “kick the can down the road”.

How can anyone who has the most basic understanding of the rapidly rising new home prices across Greater Sydney (30.4% rise in the median house price and a 13.6% increase in the median apartment prices in Greater Sydney over the last 12 months) suggest that the number one solution is to “Recommence the meeting of Australian Planning Ministers”?

Change in value – All dwellings (published November 2021)

Source: CoreLogic Home Value Index

Change in value – Houses (published November 2021)

Source: CoreLogic Home Value Index

Change in value – Apartments (published November 2021)

Source: CoreLogic Home Value Index

We need incentives for Councils to over-achieve on their housing targets.  We need rewards for those that over-deliver. We need a NSW planning system which encourages housing supply in all areas of Sydney rather than quarantining the areas from growth where demand is the highest, thus exacerbating the problem.

The NSW submission to the Commonwealth Inquiry calls for the development of a National Settlement Strategy, a full 6 months after the Commonwealth budget established the numbers.  In a clear repudiation of this call for a national re-think on immigration policy from the NSW Minister for Planning, Premier Dominic Perrottet boldly declared his preference for a “big Australia”.  Clearly, the NSW submission to the Commonwealth Inquiry had already been completed.

There are a few points where the NSW Government submission is at one with that of the Urban Taskforce.  We agree that there should be:

  • Federal Investment in infrastructure to unlock housing supply
  • Federal Government support for the removal of stamp duty and its replacement with a broad based property tax
  • Expand NHFIC lending beyond CHPs to enable the private sector to contribute to the delivery of affordable housing
  • Equal tax treatment of Build to Rent development (compared to build to sell) to encourage international and local institutional investment in this area.

In addition to these agreed actions, there is a lot the NSW Government can do right now that would achieve a lot more that the establishment of a National Planning Ministers’ talkfest!

Actions the NSW Government should take right now to improve housing supply and housing affordability

  1. Amend the Premier’s Priorities to restore the primacy of economic growth, jobs and housing supply as priorities for the public service and cabinet deliberations. This change alone would represent a demonstrative change in leadership and would shape the culture of those in the planning system
  2. Expand the current State Significant Planning Development Pathway for major housing projects (with a construction value above a defined threshold) which will contribute to housing supply and economic activity. This is critical to supporting any increase in population through the return of immigration numbers
  3. Delay the exhibition of the Draft Design and Place SEPP for 12 months to allow for the completion of the Deloitte Cost Benefit Analysis and a thorough examination of this work by industry
  4. Restructure the Planning portfolio to rationalise decision making by bringing the GSC back under the oversight of the Minister for Planning, removing duplication and avoiding doubt on the responsible decision makers
  5. Implement the NSW Productivity Commission’s White Paper 2021 recommendations for planning reform as an immediate priority of Government (without an extended process of stakeholder engagement and consultation)
  6. Relax the Apartment Design Guidelines to allow for the conversion of offices or serviced apartments into affordable housing units (thus enabling an option to take up commercial office vacancies in CBD locations and providing an immediate boost to housing supply at more affordable prices in locations where key workers want (and need) to live
  7. Encourage Councils to over-achieve on delivery against housing targets by offering grants for community infrastructure and public open space.
  8. Immediately remove the GSC District Plans’ “retain and manage industrial and urban services land” policy. This would yield an immediate boost in housing supply and economic activity
  9. Collapse the commercial and industrial zones to permit more job generating industries in more places