Sydney must “stop being afraid of heights” if it wants to seriously tackle its housing crisis. The push to build taller—alongside pragmatic takes on feasibility and long-overdue planning reform—dominated conversation last week at The Urban Developer Greater Sydney Residential Summit. Billbergia founder and managing director John Kinsella, AM, in a wide-ranging fireside interview, challenged a city gripped by supply and affordability pressures to think bigger—and higher. “As a city we’re going to have to do something for buyers and not just give them money because by just giving them easy money it inflates the price of things,” Kinsella says. “We have to do it differently. We have to look at air space. We ’ ll have to stop being afraid of height. “What is the difference between 25 floors and 35 floors if you use that 10 floors to say that we’re going to provide some affordable housing for first home buyers, not renters? “If we use airspace properly, we can actually do that.” Kinsella, whose towers at Wentworth Point and Rhodes have reshaped Sydney’s inner west, says density done well—and supported by infrastructure—unlocks land and delivers housing at scale. “We built the bridge to Rhodes, upgraded the station, funded schools and community centres. And in return we delivered more homes. That’s how it should work.” Sydney’s structural supply problem Charter Keck Cramer national research lead Richard Temlett says Sydney faces a deeper structural challenge than its peers, and can’t “sprawl its way out” of the crisis. “Unlike Brisbane and Melbourne, Sydney can’t just push further out. It has to go up,” Temlett says. “The apartment market here plays a much bigger role than in other states, and right now it’s not viable at many price points.” ▲ Charter Keck Cramer national research lead Richard Temlett: Sydney can’t sprawl its way out. “The pressure’s only going one way.” Even at the peak of previous cycles, he says, Sydney still wasn’t delivering enough. “We’ve had one to two market cycles of undersupply, and even in the boom years, we were falling short. “There’s no world where Sydney gets close to hitting its housing targets without serious uplift in apartments.” Planning reform is welcome, Temlett says, but not enough on its own. “You can have the best planning system in the world, but if the numbers don’t work, it won’t get built.” Feasibility tight but sentiment improves Developers and capital partners across multiple panels agreed: feasibility remains tough, especially for medium-density apartment projects in Sydney’s middle and outer rings. “The old benchmark was a 20 per cent return on cost,” MaxCap NSW director David Oudshoorn told the summit. “Now it’s more like 15 per cent, and even that can be a stretch. “It has to stand up without funding overlays. Once you add time, IRR (internal rate of return), loan-to-cost and real skin-in-the-game metrics, there’s not much fat left.” Mitchell Brandtman partner Tass Assarapin says costs have stabilised but remain stubborn. “It’s been really tricky. Built form is still seeing escalation, especially midrise,” he says. “Some projects in Sydney’s outer ring still cost more to build than they can sell for. That’s the red flag.” ▲ Costs remain stubborn: Mitchell Brandtman partner Tass Assarapin. He says smaller projects and significantly taller ones are faring better. “Townhouses, duplexes, 30-storey towers, they’re working,” Assarapin says. “But it’s that 30 to 100 apartment range struggling with time, compliance and cost blowouts.” Temlett adds that new stock remains largely unviable while established prices sit below delivery cost. “We won’t solve the supply crisis without delivering at scale, but in most areas, it’s still financially unviable to build,” he says. “That will only change when either the market moves or policy helps close the gap. “The Federal Government is realising the industry hasn’t responded just because you rezone land. The risk is too high, and the margins are too thin. “There’s a sense now they’ll have to act again, this time with proper incentives.” Buyers want more than the market is offering Domain chief of research and economics Nicola Powell presented data showing a clear disconnect between buyer demand and what’s being built. “Townhouses are the only product type without a geographic bias in Sydney,” Powell says.  “They’re in demand whether you’re 5km or 50km from the CBD. “Unit search volumes are up 94 per cent over the past five years. New listings have only increased by 8 per cent. That gap keeps growing.” ▲ Domain chief of research and economics Nicola Powell during her presentation at the summit: Townhouse demand dominates, she says. Powell says Gen Z and downsizers are driving demand for location, quality and sustainability but much of that stock doesn’t exist. “There’s strong interest in passively designed developments, premium units in the middle ring, and family-sized apartments that simply don’t exist in many markets,” she says. A planning system finally shifting gear After decades of inertia, NSW is now moving on long-awaited planning reform. Willowtree Planning managing director Chris Wilson describes the Housing SEPP (State Environmental Planning Policy), the HDA (Housing and Development Accord) fast-track process, and the TOD (Transit-Oriented Development) rezonings as the most ambitious overhaul since Part 3A. Introduced in 2005, Part 3A fast-tracked major projects by bypassing councils. It was scrapped in 2011 over transparency concerns. Wilson says the new framework brings back that ambition with streamlined approvals, targeted rezonings near transport, and a state-led pathway for scaled housing delivery. “It’s the lowest benchmark since Part 3A, it really is, and it’s wonderful to see it in force,” he says. But Wilson says even with new pathways and bonus incentives, many proposals still don’t stack up. “Bonuses are great, but costs are still too high. Infill affordable housing provisions ask a lot of developers, and in most locations the numbers still don’t work.” ▲ Billbergia managing director John Kinsella, AM, during his conversation with The Urban Developer’s Adam Di Marco at the event. Abadeen executive chairman Justin Brown says approvals alone don’t guarantee delivery. “We’re releasing supply, but who’s going to buy it?” Brown says.  “The last time TOD rezoning went up on the north shore, it took 15 years to absorb. “We need a delivery model that matches market reality.” The path forward: do more, go higher Kinsella says the issue now is less about planning and more about political and industry courage. “The Government is starting to come to the table. Now we need to meet them halfway,” Kinsella told the summit. “We can deliver infrastructure. We can think in precincts. But we need height and density to make it feasible.” Wilson says Sydney must let go of outdated housing ideals. “Cities aren’t museums, they’re places for people to live,” he says. “And if we want young people to stay in Sydney, we need to stop pretending they can all live in houses.” Temlett puts it bluntly: without viable projects, Sydney will keep falling further behind. “We’ve got one or two cycles before we can even hope to get back to balance,” says Temlett. “Until then, the pressure’s only going one way.”
