From Approval to Construction: Why Housing Development in Sydney is Stalling? — Sydney Auction Clearance Rate at 55%

Week’s Key Focus

In Greater Sydney, about 75,000 homes with approved development applications remain unstarted, highlighting the challenges faced by the NSW government in addressing the housing crisis under tough economic conditions. Despite the recent introduction of a three-person development authority aimed at expediting approval processes, Planning Minister Paul Scully acknowledged that the success of any regulatory reform depends on improved economic conditions. “While macroeconomic conditions are tough, the housing need is urgent. The planning system must be at its most efficient when economic conditions improve,” he said.

Since Chris Minns took office in 2023, the challenges of housing supply have only intensified. Although the government committed to building 263,000 homes in Greater Sydney by July 2029, recent forecasts suggest only 151,670 will be delivered. Under the National Housing Accord, NSW needs to build 75,000 homes annually for the next five years to meet its targets. However, as of March this year, only 45% of large-scale housing projects approved had received construction certificates, leaving 47,536 dwellings stalled—more than double the net completions in the previous year.

Further data shows that since the 2021-22 financial year, 13,687 approved development applications remained unstarted as of March 2023, which could have provided 75,205 homes. Professor Bill Randolph, Director of the City Futures Research Centre at UNSW, emphasized that the issue lies not only in the planning system but also in the market, which determines construction speed. He noted that the current economic downturn, exacerbated by the pandemic, migration, and inflation, underscores the need for a more significant counter-cyclical role for the government in delivering affordable housing.

Despite the challenges, October marked a high point for housing approvals, recording the highest number since May 2023, with nearly a 35% increase compared to the previous month. Paul Scully expressed optimism, saying the government is working to streamline the planning system and address bottlenecks in the development pipeline. However, he pointed out that delays between approvals and construction often stem from factors such as development feasibility, labor costs, material prices, and specific consent conditions. Scully emphasized the importance of balancing these challenges while considering temporary measures, such as easing tax burdens, to accelerate housing delivery.

Source: Sydney Morning Herald

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Auction Results Last Week

• Sydney: 1,169 properties went to auction, 739 results were reported, 405 properties sold, with a clearance rate of 55%. The total auction value reached AUD $431,578,152, and the median house price was AUD $1,426,000.
• Melbourne: 1,328 properties went to auction, 979 results were reported, 604 properties sold, with a clearance rate of 62%. The total auction value reached AUD $437,013,036, and the median house price was AUD $920,000.

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Top 5 Auction Prices in Sydney Last Week: Houses

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Top 5 Auction Prices in Sydney Last Week: Units

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