North Sydney Mayor Zöe Baker.Credit:Janie Barrett
North Sydney Mayor Zöe Baker called on the NSW government to offer residential builders a financial guarantee to ensure approved projects can be completed promptly. A condition of this support could be the construction of additional social housing in projects that receive the government guarantee,she said.
Conditions for residential construction in Sydney have been “particularly challenging” since the middle of last year,Rawnsley said. During that period,the number of homes approved but not commenced hardly shifted,even though new approvals have declined.
“With the pool of newly approved dwellings falling,one might expect the pool of not yet commenced dwellings to be falling too,but it remained steady,” Rawnsley said.
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Domain figures showasking rents in capital cities jumped 10.5 per cent in the year to March,amid super-low vacancy rates. The median asking rent for a unit in Sydney reached $700.
Housing Industry Association chief economist Tim Reardon warned rent hikes of that magnitude are set to continue given the inadequate pipeline of new housing.
“Sydney,Melbourne and Brisbane are in danger of double-digit rental price growth over the next three years unless they can find a way of significantly increasing the volume of apartments,” he said.
The challenges in the residential construction sector are not confined to big cities – in regional NSW the number of dwellings approved but not commenced has been trending higher for the past five years and reached 4423 in December.
Despite the glut of stalled housing approvals,Rawnsley said there are signs the backlog may soon begin to ease.
“With housing prices now rising,strong population growth,and construction costs starting to stabilise,developers could be gaining more confidence to start housing projects,” he said.
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