Western Sydney faces housing crisis as construction lags behind approvals
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In a startling revelation, a new report from Ray White Commercial Western Sydney has highlighted a vast discrepancy between the number of residential development approvals and the actual construction of homes in Western Sydney. Despite an impressive 80,000 dwellings approved for development, only a fractionâ5,369 homesâare currently being built across the region.
The Western Sydney Residential Development Overview report underscores the region’s critical role in accommodating New South Wales’ burgeoning population. With the area absorbing 57.7 per cent of the state’s population growth and nearly 60 per cent of non-detached dwelling approvals, the expectation for housing delivery is immense. Yet, the report reveals a shortfall in construction, particularly in South Western Sydney, where only 519 homes are under construction compared to the 7,335 required annually.
Peter Vines, director of Ray White Commercial Western Sydney, described the situation as “a housing crisis hidden in plain sight.” He noted, “The numbers suggest progress on paper, but the physical delivery of homes is falling dangerously behind.” Vines emphasised the gap between approvals and actual construction, attributing it to several factors including land constraints, funding issues, and bureaucratic delays.
The report’s updated demographic modelling indicates a moderation in annual housing requirements to 25,636 dwellings, down from last year’s peak of 33,596. This adjustment is not due to reduced demand but rather tempered growth expectations amid migration and housing pressures. Vines elaborated, “The money is flowing, but the homes are not keeping pace with investor appetite high, but limited stock holding back market momentum.”
The October expansion of the Home Guarantee Scheme is anticipated to further increase demand. However, Vines warned that without a corresponding increase in housing supply, this could exacerbate price inflation rather than improve housing accessibility. “If housing doesnât keep up, the airport could become a policy failure,” he said, referring to the South West precinct’s development driven by the new Western Sydney Airport and multi-billion dollar infrastructure investments.
While areas like Parramatta and The Hills have shown promise due to recent Transport Oriented Development (TOD) reforms aimed at boosting medium-density housing near metro stations, the outer growth corridors such as Camden and Liverpool remain under strain. Vines expressed concern that such reforms are aiding areas with existing infrastructure but neglecting fringe communities in dire need of development. “Western Sydney isnât just the future of NSW, itâs the present,” Vines asserted. “But if we donât turn plans into homes, weâll underestimate the entire growth model.”
The report sheds light on the challenges faced by Western Sydney in meeting its housing needs, highlighting the substantial gap between planning and execution. The region’s potential as an economic hub, particularly with the forthcoming airport, is at risk if housing supply fails to meet demand. The discrepancy between approved developments and actual construction is a pressing issue that needs addressing to prevent the housing crisis from worsening.
As Western Sydney continues to grow, the need for effective and timely housing solutions becomes increasingly critical. The report calls for action to bridge the gap between residential development approvals and construction, ensuring that the region can accommodate its expanding population and maintain its role as a vital economic and residential centre in New South Wales.