Quarterly pipeline progress

The NSW Government has a number of programs underway to actively manage the housing supply pipeline. Supporting indicators across the housing supply pipeline are also monitored, noting that beyond state government, many other factors and drivers influence how quickly new housing is delivered.

Four targets are used to monitor NSW Government program impacts from July 2022 to the present.

NSW Housing Package targets 2022

Regional Housing Strategic Planning Fund

In the December quarter, the NSW Government announced 20 successful projects under the first round of the Regional Housing Strategic Planning Fund. A total of $4 million will be shared by 19 councils across 20 projects that bring forward strategic planning for new housing in regional NSW.

Successful projects include preparation of local housing strategies, master planning initiatives, affordable housing contribution schemes and infrastructure plans. This will assist councils to be better placed to provide housing opportunities to meet the long term needs of their area.

The fund is part of the NSW Government’s response to the Regional Housing Taskforce.

A second round will commence in mid-2023.

Local Housing Strategies

The department is working closely with Greater Sydney councils to help them reach local housing supply targets through implementation of the local housing strategies.

By 31 December, 29 out of 33 councils in Greater Sydney had submitted Implementation and Delivery Plans (IDP), or equivalent strategic works program, to implement their local housing strategies. This includes an additional 11 IDPs submitted in the December quarter.

Over the next few months, the department will commence direct engagement with councils to provide support and advise on the strategic works required to deliver new housing, in alignment with their local housing strategies. It will provide an opportunity to discuss any updates to IDPs required to reflect planned strategic works.

State and council-led rezoning

In the December quarter, 16,312 rezoning lots were approved in NSW, with 79% of these in Greater Sydney and 21% in regional NSW.

Since 1 July, 18,872 lots have been rezoned – 38% of the interim target to June 2023.

Close to 48,000 lots are scheduled to be rezoned to end June 2023.

The department is closely monitoring scheduled rezonings that can contribute to the 2-year target to June 2024 of 100,000 rezoning lots approved, and to provide a buffer to mitigate against rezonings that may not progress.

Planning Pathways program

The pilot State-Assessed Planning Proposal pathway, announced in December 2022 as part of the Rezoning Pathways Program, will help prioritise assessments that contribute to housing supply. Successful applicants for initial state-assessment will be informed in the first half of 2023.

In the December quarter, 20,034 potential new dwellings were supported by NSW Government infrastructure programs. The programs provided a total of $75.6 million in co-funding to councils to deliver critical housing-enabling infrastructure. Once delivered, the infrastructure will support 13,834 dwellings in Liverpool under the Low Cost Loans Initiative and 6,200 potential dwellings in Parramatta under the Housing Acceleration Fund.

Since 1 July 2022, 43,738 potential new dwellings have been supported by NSW local infrastructure programs, exceeding the interim target for June 2023 target by 17%.

The Department is planning to announce successful projects under Round 3 of the Accelerated Infrastructure Fund in early 2023. Following quarterly Monitors will include the contribution of these projects to the interim target.

The department will begin to report on project delivery and dwelling outcomes in late 2023.

State and regionally significant approvals

In the December quarter, 16,211 dwellings were unlocked via state and regionally significant development projects. Of these approvals, 15,169 (94%) were in Greater Sydney and 1,042 (6%) in regional NSW.

Since 1 July, 25,769 dwellings have been approved under state and regionally significant developments, exceeding the interim target for June 23 by 58%.

Local development approvals

In addition, councils approved 21,223 dwellings through local DA approvals during the December quarter. Since 1 July, close to 45,000 dwellings have been approved through Local DAs. Approximately 64% of these dwellings are multi-unit dwellings.

ABS data shows that building approvals (to commence construction) across NSW were down 15.1% in the 12-months to December 2022 (53,312 dwellings), and dwelling commencements were down 19.2% in the 12 months to September 2022 (51,683).

While completions had only fallen 1.4% in the 12-months to September 2022 (47,459) compared to the previous year, the construction activity slowdown poses a significant risk to the pipeline of new dwellings. Reduced project feasibility and increasing circumstances of project delays and abandonment reported by industry mean the short-term outlook remains of particular concern.

In the December quarter, 2,672 dwellings were approved for construction in regional NSW. Since 1 July, 4,671 regional dwellings have received construction approval—37% of the interim target for 2022-23. Note this data reflects reporting from Councils into the NSW Planning Portal and should not be compared to ABS data which has a different methodology.

Despite a large volume of projects with development approval, NSW is unlikely to deliver enough construction activity in the short-term, to meet the interim target of 12,700 dwellings in regional NSW by June 2023. However, the Regional Housing Program continues to support a sustainable pipeline of supply in Regional NSW to meet the target of 127,000 dwellings by 2030-31.

Source: Australian Bureau of Statistics, Building Approvals, Australia (original) (data to December 2022)

Source: Australian Bureau of Statistics, Building Approvals, Australia (original) (data to September quarter 2022)

Housing supply pipeline – key indicators summary