Housing was front and centre of the NSW Government’s budget this week with Treasurer Daniel Mookhey committing $1 billion to developers to build new homes.
Over a five-year period, the government will act as guarantor on up to 50 per cent of approved housing projects across the state. The Australia-first initiative will provide between $5 million and $50 million in pre-sale guarantees for each project.
The scheme – which will proceed on a rolling basis – will bring forward “the construction of up to 15,000 extra market homes over the next five years,” said Mookhey, presenting his third budget to parliament on Tuesday. “These are the projects that will add more low-to-medium density housing in neighbourhoods people love to live in,” he added.
For projects eligible for the guarantee, the government will ensure the sale of a set number of homes, said Mookhey. “This will spare industry from some of the time and cost of having to convince their lenders there are enough buyers for the homes they want to build. It will let them get on with building more homes for people to buy. And it will make sure more of the homes that are getting approved are then getting built.”
Applications are expected to be accepted by the end of the year.
Paired with the pre-sale finance guarantee is a tax cut to spur the construction of more apartments for people to rent. “The government will make permanent the 50 per cent land tax discount for build-to-rent projects. Ending doubt about whether these projects can get funding from the market. Sending a strong signal that build-to-rent is here to stay,” said Mookhey.
Meanwhile, $83.4 million has been pledged to accelerate planning approvals, including for large-scale market, social and affordable housing projects. This includes $10.6 million for the newly established Housing Delivery Authority, which has fast-tracked approval for 53,500 homes across 136 residential projects since January.
In addition, Mookhey announced an investment of $145 million to support the ongoing work of the Building Commission NSW to reform the building and construction industry.
The NSW budget also invests $20.9 million to support regional councils to bring forward critical enabling infrastructure for new homes by funding interest on loans.
To help address the construction workforce shortage $1.2 billion will be invested in TAFE. This includes $40.2 million to continue fee-free apprenticeships and traineeships for priority qualifications.
The suite of measures is designed to alleviate the state’s housing crisis. “A housing crisis that was decades in the making will not end overnight. So let us all resolve to keep building,” said Mookhey.
A great example of government listening to industry.
Local Government NSW welcomed the range of budgetary measures to promote housing development across the state, “which reflect recognition that emphasis on the planning system alone will not resolve the housing crisis.”
However, LGNSW president Phyllis Miller said, “Despite the Treasurer’s speech focusing on the need for housing across the state and setting out a guarantee for the development industry, there is no new guarantee for our communities as there is no new funding for public and social housing.”
The Urban Development Institute of Australia also welcomed the “much-needed housing initiatives” announced in the budget, especially the pre-sale finance guarantee. “It’s good policy and a great example of government listening and responding to industry,” CEO Stuart Ayres said.
But Ayres said more will need to be done for the state to be heading in the right direction on housing. “The only realistic path forward is to urgently remove barriers to new housing supply.”
“The government must remain vigilant and committed to improving a planning system that is currently not capable of facilitating the homes we need to tackle the housing crisis,” he added.
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