The jury is still out on whether the host of policy changes aimed at boosting housing supply in NSW will bear fruit.
Last year about 48,000 homes were completed in NSW, well short of the state’s target of 75,000 homes a year for the next five years to meet the National Housing Accord targets.
But Colliers director Adrian Miller said further policy changes were required.
“Policy changes need to prove effective in providing the next sites for redevelopment so that our kids have a place to live,” Miller said.
Miller said some new policies, such as the infill affordable housing provisions within the Housing SEPP, had been attractive for developers.
Under the policy, introduced late last year, developers are eligible for height and floor spaces bonuses of up to 30 per cent with the inclusion of a minimum of 15 per cent affordable housing.
Urbis director Ashleigh Ryan said that of the recent policy changes, this one had been the most successful.
“We have been preparing and lodging a number of State Significant Development Applications under the policy since it was announced in December last year,” Ryan said.
But the Transport Oriented Development (TOD) program, which was also introduced late last year, is yet to achieve significant results.
Of the 37 TOD precincts allocated to benefit from rezoning within 400m of stations, 18 were active.
The original TOD plans said the state-wide rezoning would take effect across all precincts from April this year, however deferrals have been granted to 19 councils until later in the year.
Rezoning land close to transport corridors is intended to provide economic incentive for new supply but developers face the challenge of return on investment from sites with high land prices and limited development scales permitted by the TOD program.
Residential apartment buildings can be up to 22m high, shoptops up to 24m with the maximum floorspace ratio allowable of 2.5:1.
There is also a requirement that 2 per cent of developments be provided for affordable housing.
Ryan said she had not seen significant interest in the policy from developers, saying that the TOD program was one lever in incentivising more housing, not a silver bullet.
“It will work in some precincts where the ultimate sale price of these units will justify the cost of amalgamating the site and cost of construction, but it’s difficult to justify in a lot of the precincts,” Ryan said.
Colliers national director Guillaume Volz said the TOD policy “opens up a lot of land for development but the economics don’t add up in all areas”.
“For instance, if a developer purchases a house as part of a development site in Dulwich Hill where there are mostly semi-houses on 254sq m of land, the gross floor area provided under the TOD program doesn’t enable an uplift in value in that market,” Volz said.
“However, while the development uplift may be too slim in some areas, there are others where it is feasible.
“If you take Roseville for instance, you have land-rich properties and higher value metrics, that when combined with uplift to floor space that has been provided via the TOD, provides sufficient incentive for owners to pursue the development upside and entertain collective sales with their neighbours.
“When you can get the economics working you can get the housing delivery working.”
The first stage of reforms for low and midrise housing came into effect on July 1, providing for dual occupancies and semi-detached homes.
But the policy stage that would enable more terraces, townhouses and small apartment blocks has been kicked down the road until later this year.
Developer and founder of DA Properties David Allen said the low to midrise reforms were welcome in the downsizer market.
