Housing development supply targets set too low: NSW Department of Planning and Infrastructure

Demand for new housing in Sydney will continue to outstrip supply as development targets have been set too low to accommodate population growth, according to NSW Department of Planning and Infrastructure director general Sam Haddad.

“Indicators are that for the next couple of years we are going to achieve our targets of 25,000 to 27,000 dwellings in Sydney and I’m not sure that’s enough,” Haddad said last week at an industry forum organised by the Committee for Economic Development of Australia.

The department last year predicted the NSW population would increase by two million people to reach 9.2 million by 2031. Since then it has been examining updated Australian Bureau of Statistics data and invested in improving its population forecasts.

“Indications are that we are expecting a much higher population than we have predicted before,” Haddad said.

A larger population in Sydney meant demand for new housing would be much higher than previously anticipated and the existing targets for housing development would be too low.

The total number of dwelling units approved in NSW fell 0.2% in February after rising for 24 months, ABS data shows.

Approval times for new dwellings fell in 2012-13 compared with the previous year, according to the Local Development Performance Monitoring Report for 2012-2013. It took 68 days on average to approve a development application in 2012-13, three days less than in the previous year. Fast-tracked approvals took 17 days on average, one day less than the year before.

Haddad said there was a lag between dwellings being approved and work commencing, which the department was trying to understand but its key focus was on driving changes to the NSW planning system.

The department released a white paper outlining a new planning system for NSW and draft planning legislation on April 16 last year. The paper and legislation were on public exhibition until June 28.

The draft legislation has not yet been passed but Haddad said he was hopeful that it would pass soon as existing legislation could not cope with changes to population, community and investor expectations, environmental concerns and how infrastructure was integrated into urban developments.

“NSW is changing and we need to look ahead as to how we are going to manage this change and manage growth ... The current planning legislation cannot cope with the change that I’m talking about. It can no longer deliver to the community,” he said.