Builders have applauded NSW’s commitment to plug up the state’s housing shortage by tearing down supply barriers for home construction.
On Tuesday, Treasurer Daniel Mookhey promised to fund an “unprecedented intervention in the housing market” in the state’s latest budget, doubling down on commitments to free up unused public land for developers and boosting productivity for residential builders.
Under the new plan, the government has committed to auditing publicly owned, under-utilised land to identify additional plots, including in already built-up suburbs, that can be devoted to building 21,000 new homes.
Moohkey pledged $5.1bn to build 8,400 new homes, which will be owned by the state body Homes NSW and earmarked for victims of family violence, and $1bn to repair 33,5000 existing social homes.
Essential workers like nurses and firefighters have also been handed a win, with $650m allocated for build-to-rent programs and rural and regional accommodation for essential workers.
The state is set to spend $8.7bn in the next financial year on other “cost-of-living support measures” including $10,000 grants for eligible first home buyers, $350 rebates for the electricity bills of concession card holders and a one-off relief payment of up to $300 to go towards the energy bills of all households.
Master Builders Association of NSW Executive Director Brian Seidler said Mookey’s investment into the housing sector would be vital to helping the state close the gap on their target to build 377,000 new homes by 2029.
“Build times have blown out year on year in part due to long delays in planning approvals, therefore, the measures to speed up the delivery of development approvals are greatly appreciated and will play a significant role in reducing build costs caused by such brakes on work,” said Seidler.
“A record investment for social and affordable housing for our most vulnerable will improve the critical undersupply of housing in this area of the market.
“Build-to-rent projects helps to diversify the NSW housing market and provides an opportunity to make rental accommodation more affordable.
“Higher density construction will play a key role in achieving the housing targets, but over the last decade, we have seen construction times blow out from an average of 22 months to over 30 months.
Can the budget save home builders?
While the funding is welcomed by industry groups, it remains to be seen whether the budget can change course for the state’s residential construction industry.
Only 44,675 new dwellings were approved in NSW in the 12 months to January 2024, a far cry from the 90,000 approvals needed in NSW each year.
Since then, building approvals have repeatedly set record lows, with the state only reaching 3,467 in April.
That same month, Master Builders said NSW was on track to fall 27,600 homes short of the Housing Accord targets, the second-highest deficit of any state or territory in the country.
According to Seidler, there’s a long road ahead if that state hopes to dig the construction industry out of its financial hole.
“Building and construction businesses have been struggling with rising operating costs and increasing project risks for several years now, with a significant number tipping over the edge,” he said.
“Over 98 per cent of the industry is made up of small business and they are doing it tough.
“We know that when the building and construction industry is strong, so too is the economy. For every one dollar invested in the industry, three dollars is returned to the economy.”
