NSW Government May Need to Build 75% More Homes to Avoid Worsening Housing Crisis

According to recent departmental briefing documents, New South Wales (NSW) will need to construct 75% more homes than originally estimated over the next five years to keep up with the rising demand and avoid worsening the housing crisis. The state is only projected to provide 36,000 new homes annually for the next five years, with a requirement of 62,800. Planning Minister Paul Scully acknowledged that this shortfall is greater than initially predicted.

Additionally, the average processing time for development approvals has increased from 83 days in 2021-22 to 105 days in the current financial year, with March’s DAs processed in 116 days. The delays have been attributed to staff shortages and incomplete applications. The department has been tasked with identifying strategies to expedite the process, including exploring the use of artificial intelligence to evaluate DAs against local environment plans and development controls.

In his first major interview since assuming the portfolio, Scully stated that the state government might need to exceed its election pledge to intensify housing density near transport corridors and infrastructure to address the issue. Scully and Premier Chris Minns have previously talked about “rebalancing” Sydney’s growth by increasing housing targets in the east, but Scully acknowledged that it would not necessarily entail lowering housing targets in western Sydney, which is the growth engine of the state.

Scully stated that the government is examining ways to speed up the process and that the commitments made during the election were appropriate given the numbers he has seen. The Premier has emphasised the need to expedite supply to address the issue. The situation indicates that the government may need to implement further measures to boost supply beyond what was previously planned.