Excessive requirements relating to design features such as size, cross ventilation, natural daylight and building depth are adding as much as $150,000 to the cost of delivering new apartments in Sydney compared to the case in Melbourne, a property industry lobby group has claimed.
Unveiling the results of its latest research, the Urban Taskforce says that an average newly constructed apartment containing two bedrooms and two bathrooms which could be purchased for $750k in Sydney could be purchased for just $600k if applicable design standards in Melbourne were applied.
Urban Taskforce chief executive officer Chris Johnson says new apartment costs in Sydney are being driven up by unduly onerous requirements which are laid out in State Environmental Planning Policy 65 (SEPP 65) and the NSW Government’s Apartment Design Guide.
“Sydney apartments are costing far more than those in Melbourne and Brisbane mainly because the NSW planning system requires much higher standards,” Johnson said.
“The NSW / Sydney standards are from well-meaning planners wanting big apartments that get lots of sunshine but these amenities come at a cost that is forcing many purchasers out of the market.
“The apartment dwellers of Melbourne and Brisbane are not very different from those in Sydney so the Urban Taskforce believes we should relax the Sydney standards particularly in urban precincts so more people can live an urban life in apartments.”
According to Johnson, the most significant difference arises out of requirements relating to apartment size.
For a two-bedroom apartment with two bathrooms, he says Sydney standards require 75 square meters whereas in Melbourne 65 square meters is achievable.
At the average Sydney sale price of $10,000 per square meter, he said that added $100,000 to the cost of a home all up compared with Melbourne.
Requirements relating to cross-ventilation, solar access in winter and building depth add a further $24,000 to the sale price of a new apartment in Sydney compared to Melbourne whilst a further $33,000 is added by a combination of more flexibility for above ground car parking that is well screened, excessive ceiling heights for kitchens, and lower floors along with additional open space.
In addition to costing more, Johnson says a number of these requirements are preventing residential projects from going ahead.
He takes particular issue with a requirement that 70 percent of apartments within a given development get solar access for at least two hours between the hours of 9am and 3pm – a requirement he says could see projects which would otherwise be viable in Melbourne or Brisbane stopped in their tracks in Sydney.
According to Johnson, the primary cost associated with all of this is felt by consumers, who are forced to pay more for their apartments.
Whilst from a developer perspective these costs impacted the viability of some projects, Johnson said the primary impact of minimum apartment sizes from a developer perspective was simply to sell fewer apartments but to sell each individual apartment at a higher price bracket than would otherwise be the case.
In calling for change, Johnson would like to see apartment controls eased for projects which contribute to housing affordability.
The NSW Apartment Design Guide, he said, should also have an ‘urban core’ section which reduces standards in these localities to Melbourne levels.