THE PROPERTY DEVELOPMENT REVIEW
doing, and the NSW Government has either pushed height limits and so on in a different direction, while the low to midrise policy is not fully transparent yet. So a lot of councils have not been too happy.” While the policies will provide “notably higher development capacity” across Sydney, they do not address market
fundamentals and therefore many developers continue to keep projects on hold “as they attempt to filter through the confusion surrounding policy interaction and a range of uncertainties,” according to Charter Keck Cramer’s report. “And without that alignment it’s hard for developers on the ground to bring things effectively to market.” Inconsistencies rampant
Brendan Woolley, director at property industry analysts Charter Keck Cramer.
Another example of this misalignment is development assessment times. The NSW Government launched an interactive dashboard ranking councils by assessment times, exposing a number of councils in various reports based on the data. According to the database, for the year to June 2024, North Sydney, Sutherland and Georges River were the worst performers in the Sydney region, with Georges River taking 285 days from submission to determination, North Sydney coming in at just over 270 days, and 263 days for Sutherland. The best were Woollondilly at 61.5 days, Blacktown with 79.5 and Camden with 81 days. Fastest turnarounds As the Property Council of Australia pointed out with their own data earlier this year, regional councils have much lower assessment times—Narrandera, in the Riverina between Griffith and Wagga Wagga, has the fastest average determination time with 20 days. Given that it only had 48 development applications in that period, it’s not surprising. But what this shows is a huge disparity between councils in their ability, capacity and desire to push through much-needed residential development. “This poses a real opportunity, where there’s more capacity for additional funding and town planning resources within local councils and enabling local councils to handle heavier workloads,” Woolley says. “The residential development market is really struggling with the number of approvals down, the number of applications declining. Theoretically with fewer applications, projects should be approved faster. “So there will be a lot more pressure when the market picks up.” Approvals for new housing across Australia rose 10.4 per cent in July to 14,797 –still 5.1 per cent below the five-year average, according to the Property Council of Australia. But in NSW, the number of houses approved declined 1.3 per cent and the number of total dwelling units rose only 0.5 per cent, the lowest of the five biggest states. Consistency and transparency Another major issue directly impacting feasibilities is the increase in infrastructure and other levies and contributions, which lack consistency at local as well as state level. “In some locations, local contributions have increased from $20,000 per dwelling to $70,000 per dwelling, and there are a lot of state government levies with new ones being introduced all the time, which is limiting opps and counteracting opportunities,” Woolley says. Slowest turnarounds “Once levies are in place, government is not keen to remove them. “But councils are doing different things and there is inconsistency and a lack of understanding on certain numbers, which is something that needs to be looked into.” There are some relatively quick and effective changes that can be introduced, says Woolley. “And enabling local councils and gearing them up to have more transparency and consistency and looking at the way contributions are levied, that market understanding is a key one. “Another aspect is looking at contributions, the way affordable housing contributions are levied are quite different and you can potentially have affordable housing contributions at three levels of government.” Developers spoke about inconsistency with timing and transparency, he says, and these are some fundamental issues which the NSW Government and councils can deal with. “The market dynamics are in such contrast where we have a huge demand for new supply, but bringing that supply to market is so difficult. It’s ongoing and aggregating undersupply,” Woolley says. “There needs to be assistance from particularly government in this instance to remove or adjust some of these hurdles in place, making bringing projects to market really difficult. “From a market and feasibility standpoint, the challenges aren’t going to resolve by themselves.”
September / October 2024 – 23
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