It is getting on to six months since the NSW election was won by the coalition yet the messaging about growth particularly for housing has been very minimal.

At the end of August 2019 the Australian Bureau of Statistics data indicated a drop in home approvals of 39 per cent over the last two years. More worrying is the 20 per cent drop in approvals for new homes over the last 5 months. Elections are not a good time to be pro-growth and it was clear from the beginning of 2019 that politicians were lining up to show how anti-development they were. In the electorate of Ryde the two major candidates went all out to stop any new development. And similar sentiments were played out across many electorates in the build up to the March state election. The main focus of concern was about apartments which are clearly a different housing type to the comfortable detached house. The result of this negative environment is that apartment approvals in New South Wales have dropped by 40 percent over the last year from 2,901 in July 2018 to 1,756 in July 2019.  Since the March 2019 election apartment approvals have dropped by 33.4 per cent in only 4 months. Since the peak in July 2016 apartment approvals in NSW have dropped by a massive 59 per cent.

During the state election period the NSW Premier proposed that immigration to NSW should be halved setting the tone for an anti-growth position during the election. If the objective of anti-growth messaging was to slow down the supply of new housing, particularly apartments, then the strategy is clearly working. The problem is that NSW Treasury needs the stamp duty from new home sales as they have already written off $4 billion from potential stamp duty in the forward estimates. If this amount of lost income grows the NSW economy will be affected. The real reason for the tensions is that as house prices have boomed over the last decade many couples or young families have decided that apartment living is a more affordable option. At the time of the 2016 census 30 per cent of Sydney’s homes were apartments and three years on this has probably grown to 33 per cent or a third. This clearly raises a tension with the low rise suburbs who tend to see the taller more urban apartment buildings as being different to the detached house model and they therefore protest about this new form of housing. Traffic congestion is often the first complaint about apartment buildings but the location of most apartments has been close to public transport, particularly heavy rail or to the newer metro rail network.

It would seem that the state politicians have not moved on from the election based rhetoric that Sydney is full and that we need to stop growth. Recent messaging against growth have included the Star’s proposed Ritz Carlton tower in Pyrmont where the government’s planning department are trying to stop the project after 4 or 5 years of allowing millions of dollars to be spent on planning at the request of the planning department. Another project is St Leonards South where the local Lane Cove Council proposed that an area close to St Leonards Station could be redeveloped as a Transit Oriented Development (TOD) to be the best location for council’s contribution to Sydney’s future housing supply. But, amazingly, the state government’s Independent Planning Commission has recommended that the project be scrapped based on questionable reasons about the amount of open space.

The politics of growth become very sensitive when one third of a city like Sydney is urban apartments while the other two thirds is suburban houses. Clearly the detached house dwellers feel threatened by the changing environment but as Sydney grows from 5 million people to 8 million people over the next 30 to 40 years the only sustainable model is to blend the urban apartment model with the suburban house model. Importantly a rapid transit metro rail system that underpins the urban model can move travel from cars to trains and Sydney can grow just like London or New York.