When it comes to trashing the built environment & amenities in small regional towns the Minns Labor Government is as big a destructive bully as its Liberal-Nationals predecessors

 

This is a cruel hoax being perpetrated by the NSW Minns Labor Government which benefits no-one except financial speculators and slapdash property developers 

Echo, 21 December 2023:

The latest ‘affordable housing’ reforms by the NSW Labor government have been roundly criticised by the peak body representing councils, with Local Government NSW (LGNSW) saying it ‘further erodes council involvement in town planning, giving developers increasingly free rein in both city and country’.

The legislation that governs NSW ‘affordable housing’ is the State Environmental Planning Policy (SEPP), and a revamped SEPP came into effect last week under NSW Labor, which aims ‘to make it faster and easier to build more affordable housing’.

It followed the original policy announcement made earlier in June.

A joint statement by Minister for Planning and Public Spaces, Paul Scully, and Minister for Housing, Homelessness and the North Coast, Rose Jackson, spun a positive message around the reform, including amendments ‘to ensure the bonuses are available to Build to Rent developments, by allowing them to apply in commercial zones, even if residential accommodation is prohibited under the relevant Local Environmental Plan (LEP)’.

Inconsistent statements

Ms Jackson said, in the media release, ‘These reforms are about bringing together all key delivery partners while making sure we consider the views of councils and communities, so we get high quality homes supported by the right infrastructure and amenity.’

Yet LGNSW president, Cr Turley, said the new SEPP removes councils from the approval process, which removes community checks and balances, and that the reforms also do not address how the infrastructure required by the additional density and growth in population would be funded.

‘You can vote out a council which makes planning decisions you don’t support, but you have no such power to get rid of the bureaucrats,’ she said.

The Echo asked the office of Ms Jackson why she believes councils’ views were considered in the revised SEPP, given the views of LGNSW.

Additionally, The Echo asked how can the NSW government ‘be confident that their affordable housing reform will be effective, given there is no measure of effectiveness in this reform?’.

Also, ‘Does Ms Jackson support a parliamentary inquiry into the SEPP to establish how affordable housing outcomes can be measured and improved?’

Ms Jackson’s reply will be published if received.

Cr Turley added the SEPP change also allows developers of the biggest buildings to bypass every single component of the council approval process, leaving no protection for local communities.

‘Under the State Significant Development (SSD) pathway, communities will be at the mercy of faceless government bureaucrats any time a building costs more than $75m in the city, or $30m in regional areas’, she said.

It's the state and territory governments more than the federal government which are going to decide renters ability to attain & retain housing in the near future

 

In Australia there is evidence to suggest that by 2022 there were est. 640,000 Australian households whose housing needs were not being met. 

These households are either experiencing homelessness, in overcrowded homes or spending over 30% of their income on rent.

This unmet housing need is projected to increase to 940,000 households in 2041.

In a November 2022 the Community Housing Industry Association released a report noting the unmet need in states/territories/regions by number and percentage of all households. 

CHIA, Nov 2022, “Quantifying Australia’s unmet housing need: A national snapshot”, p.2

On 29 June 2022 The Guardian reported:

The public housing waiting list across all jurisdictions rose by more than 8,000 households last year, from 155,141 to 163,508. Most of the increase was among households considered “in greatest need”. While for the last nine years social housing stock remained static at est. 4.2% of all housing stock.

The National Cabinet meeting last Friday, 28 April 2023, ended with these joint announcements by the Prime Minister and state & territories leaders, according to ABC News:

• National cabinet has endorsed $2.2b in measures to strengthen Medicare

• The announcements include expanding the nursing workforce to improve access to primary care and incentives for doctors to stay open for longer hours

• Housing ministers will develop a proposal outlining ways to strengthen renters rights, which will be dealt with by national cabinet later in the year

• Work will be undertaken to improve the migration system through increased visa processing capacity and expanding pathways to permanent residency for skilled workers. [my yellow highlighting]

What is clear is that although there may be the intention that a guiding statement on renters rights will eventually be produced by the National Cabinet, it will be left to individual states and territories to decide how and to what degree renters rights will be strengthened.

As for the built-to-rent component of any national plan to increase housing stock, Master Builders Australia sent out a media release immediately after this National Cabinet meeting welcoming a national approach to reforms to address the housing crisis which stated in part:

Master Builders Australia CEO Denita Wawn said the decision to tackle infrastructure investment, planning reforms to increase housing supply and affordability alongside sustainable growth across states and territories is an important signal for the industry.

“Industry will work closely with the Planning Ministers and National Cabinet to ensure all options are on the table and there are no unintended consequences of other reforms that may dampen this effort,” said Ms Wawn.

The Commonwealth Government also announced a series of other measures to boost investment for increasing housing supply including: increasing the depreciation rate [from 2% to 4%] for eligible new build-to-rent projects, and reducing the withholding tax rate for eligible fund payments for managed investment trusts to foreign residents on income from newly constructed residential build-to-rent properties.

However, Master Builders Australia went on to make an ambit claim for further reform:

“More needs to be done to speed up the delivery of new housing in the medium and high-density part of the market over the short term. Government efforts to expand the stock of build-to-rent will provide welcome support.

“The challenge will be to make sure that we put downward pressure on building and construction costs to increase output.

“Builders continue to face regulatory burdens and prolonged delays in approvals for building applications, occupation certificates and land titles. Additionally, land shortages in the wrong places, high developer charges and inflexible planning laws are restricting opportunities to meet demand, speed up project timelines, and minimise costs to both builders and their clients,” Ms Wawn said.

Master Builders’ Delivering the housing needs for all Australians recommends policies around housing supply, workforce, supply chain risk and cost pressures, simplifying regulatory settings that support investment in housing and business productivity.

The Property Council of Australia is also in favour of what it classes on its website News & Research page as the emerging build-to-rent sector.

It sees this sector as having the potential to deliver 150,000 new build-to-rent homes into the rental market in the next 10 years (by 2043) and says of a report it commissioned from Ernst Young and published on 4 April 2023:

.. estimates that the current size of the build-to-rent sector in Australia is $16.87 billion (this equates to roughly 0.2 per cent of the total value of the residential housing sector), with the expectation that this value will continue to grow in the coming years. If it reached just 3 per cent of the residential market, it could be worth $290 billion.

In comparison, the build-to-rent sector comprises of 5.4 per cent of the total value of the residential sector in the UK and 12 per cent in the US.

The Housing Industry Association also issued a media release on 28 April 2023 welcoming the National Cabinet’s agreement today to support a range of reforms to address housing supply, stating:

HIA’s Deputy Managing Director – Industry and Policy, Jocelyn Martin said the decision to tackle planning reforms to increase housing supply and affordability ultimately leads to more affordable rental accommodation and provides the capacity to deliver social housing without impacting housing supply more broadly.

On the part of federal and state governments there appears to be an aversion to their having direct ownership of any project building social housing and, on the part of finance and construction industries – along with property developers and investors – there appears to be a similar aversion to such a direct supply of social housing by the first two tiers of government.

Perhaps the smell of desperation in the air – with 243 construction businesses put into insolvency by the Australian Securities & Investment Commission (ASIC) in March 2023 alone, joining an unspecified number of other construction, registered property investment and/or property development corporations within the January to March 1,879 businesses-strong insolvency list – has the National Cabinet seeking to resuscitate more than one bird with its housing funding commitments. 

Note: Searchable ASIC list can be found at

https://publishednotices.asic.gov.au/browsesearch-notices/

All these government and non-government actors appear to be suggesting that: after relaxing planning laws; increasing investment opportunities along with potential profits for all classes of investors; and the possibility for individuals, partnerships & corporations to access grants & other benefits in the proposed $10 billion Housing Australia Future Fund; then market forces will inevitably push rental costs down once housing supply increases even though the most optimistic rendition of proposed supply is unlikely to fully meet the nation's unmet secure residential housing need.

My admittedly jaded personal response to the idea that residential rents will significantly reduce over the next 10 years……

via GIPHY

I'm hoping that time will prove me wrong.

Australia's housing access & affordability crisis not going to ease in the near future

The estimated usual resident population of the NSW Northern Rivers region at the 2021 census was 311,177 men, women and children and the largest age cohort appears to be people aged between 55-69 years of age. 

These regional residents are living in est.143,846 freestanding houses, semi-detached town houses, units, flats, cabins and caravans.

From I July 2021 to January 2023 there have been a total of 2,137 new building approvals granted across the region. This represents a fall of -31 housing approvals compared to those granted from 1 July 2020 to 30 June 21. Most of these approvals appear to have been for free standing houses.

As of 4 April 2023 there are est. 700 properties on the regional rental market, with approximately half priced between $800 to $3,500 a week. In 2021 in Northern Rivers Region an estimated half of all households had incomes below $2,000 per week and only 13.1% of all households earned an income of $3,000 or more per week.

“Housing markets are now at an inflection point. At a time of returning migration, they are contending with a perfect storm of high inflation and interest rates, slowing supply and record low vacancy rates.”

[State of the Nation’s Housing Report 2022–23, 3 April 2023]

Australian Government, National Housing Finance and Investment Corporation (NHFIC), 3 April 2023:

State of the Nation’s Housing Report 2022–23

Australia’s housing markets have been through an extraordinary period, impacted by COVID-19 related lockdowns, low population growth and record amounts of monetary and fiscal stimulus.

NHFIC modelling in the State of the Nation’s Housing 2022-23 suggests:

• More than 1.8 million new households are expected to form across Australia from 2023 to 2033, taking total households to 12.6 million (up from 10.7 million in 2022). These households are expected to comprise around 1.7 million new occupied households and 116,000 vacant properties (e.g. holiday homes).

• The much earlier increase in interest rates (relative to previous Reserve Bank of Australia guidance) is adversely impacting supply. NHFIC expects around 148,500 new dwellings (net of demolitions) to be delivered in 2022-23, before net new construction falls to 127,500 in 2024-25. A recovery in supply is expected after 2025-26 on the back of changing macroeconomic conditions and stronger underlying demand.

• Slowing supply, together with increasing household formation is expected to lead to a supply household formation balance of around -106,300 dwellings (cumulative) over the 5 years to 2027 (and around -79,300 dwellings over the projection period 2023 to 2033).

• From 2023 to 2032, household formation is expected to be dominated by lone person households (563,600 additional households), followed by couples with children households (533,300 additional households). Within 5 years, it is expected lone person households will be the fastest growing household type across the country.

• NHFIC continues to expect a shortage of apartments and multi-density dwellings for rent over the medium-term. Net additions of apartments and medium-density dwellings such as town houses are projected to be around 57,000 a year (on average) over the 5 years to 2026-27, around 40% less than the levels seen in the late 2010s.

• The premium for space at home, with ongoing work from home arrangements following the pandemic has contributed to reducing average household size. This has been a factor in sharply falling vacancy rates. Analysis shows that decreasing household size since mid-2021 led to an additional 341,500 households forming, or around 103,000 in net terms since the beginning of COVID-19.

• NHFIC estimates that, conservatively, around 377,600 households are in housing need, comprising 331,000 households in rental stress and 46,500 households experiencing homelessness. Housing need across the country range from 208,200 households in highly acute rental stress to 577,400 households under less acute rental pressure.

Key findings:

• Strong demand for housing coupled with tight supply of both labour and materials, and bad weather has put significant pressure on the construction industry. Approximately 28,000 dwellings were delayed in 2022. NHFIC’s industry consultation suggests builders are making cost allowances of up to 40% for unexpected delays, up from a more normal 20%.

• In addition to higher interest rates, supply of new housing continues to be impeded by a range of factors including, the availability of serviced land, higher construction costs, ongoing community opposition to development and long lead times for delivering new supply.

• Rental growth and rental affordability varied significantly across and within greater city and regional areas, with rental growth in regional areas now falling after a period of record demand. Rental growth in major cities such as Sydney and Melbourne are outpacing rental growth in regional NSW and Vic, which suggests the premium of living in large cities close to employment centres may be returning.

• Rental affordability has varied greatly across the country during COVID-19. In Sydney, rents in several outer Local Government Areas (LGAs) increased more than 30% from early-2020 to January 2023 and more than 3 times that of some inner-city LGAs. Outcomes in Melbourne have been more subdued, with more than half of Melbourne’s LGAs experiencing rental increases of less than 10% since pre-pandemic. Southeast Qld has had the largest rental rises, with all 12 LGAs experiencing rental increases of 30% or more.

• Trends in the macroeconomy can affect the ability of first home buyers to enter the market. Analysis shows that since the 1990s in Sydney, deposit hurdle rates (i.e. deposit as a percentage of income) on average increased by around 8% during an interest rate tightening cycle (-10% so far this cycle), compared with 26% during easing cycles. The average deposit required as a percentage of annual income has nearly doubled over this period from 60% to 110%.

Download the report

State of the Nation's Housing Report 2022-23 (pdf 3.75 MB) https://www.nhfic.gov.au/sites/default/files/2023-03/state_of_the_nations_housing_report_2022-23.pdf

“In the detached market, in the 12 months to January 2023, average capital city price growth dropped to -4% after peaking at 23% in the last quarter of 2021.

Sydney and Melbourne were most impacted, with house prices falling around 15% and 11% respectively over the12 months to January 2023. House price growth was still relatively strong in Adelaide (6%) followed by Darwin (5%) and Perth (3%).

Detached house price growth in regional NSW, Vic, Qld, SA, WA and Tas outpaced growth in capital city areas of these states. The strongest regional price increase was in regional SA”

[State of the Nation’s Housing Report 2022–23, 3 April 2023]

According to the Reserve Bank of Australia, 16 March 2023:

 

The share of households that rent has risen over the past few decades, mainly in the eastern states. This reflects a rise in the proportion of private renters as home ownership rates have declined. The share of households in public housing has also declined, as growth in public housing stock has not kept pace with growth in the total number of households. Rent assistance to private tenants has also become a more common way of providing housing assistance to lower income households……

The average and median incomes of renter households are generally lower than owner-occupiers across age groups.... However, the share of private renters who are in the top half of the income distribution has risen over time as the share of private renters in higher paid jobs, such as professional services, has increased. This shift has coincided with an increase in the average age of first home buyers and a decline in the home ownership rate among younger households…..

Renters, especially those on lower incomes, tend to spend a larger proportion of their incomes on basic living expenses and have less spare cash flow (i.e. income available to spend on discretionary consumption or save), relative to those who have a mortgage. Renters also tend to have lower savings buffers. In combination, these factors can make renters more vulnerable to increases in the cost of living and make it more difficult for these households to accumulate wealth over time, compared with owner-occupiers….

Nearly 90 per cent of all households in the lowest wealth quintile were renters in 2019/20. This in part reflects that renters tend to be younger than other types of households and so have had less opportunity to accumulate savings over time. However, renters also tend to have lower wealth compared with owner-occupier households even after controlling for age and income....

The Australian Bureau of Statistics Monthly Consumer Price Index (CPI) showed that Rent CPI stood at 1.0% in April 2022 and had risen to 1.6% by May - then risen again in July to 2.0%, August 2.4%, September 2.9% & December 4.1%. 

The start of a new year saw the Rent CPI at 4.8% in January & February 2023. The next release of monthly CPI data occurs on 26 April 2023.

Is Byron Bay the target of another television production company?

 

This television production company, the aptly named Cavalier, is apparently happy to inflate property prices in an area already plagued with a lack of affordable housing.

Echo NetDaily, 28 July 2021:

Plans by reality television TV show, The Block (Nine), to base an upcoming series on Sunrise Boulevard in Sunrise, Byron Bay, has upset an elderly neighbour.

Resident, Dorothy May, says she was offered well above market value for her home, but refused to sell.

Dorothy is 74, and a cancer patient in palliative care.

She told The Echo she was asked to sell by agents representing the company, but has refused.

She says her house is located in the middle of five homes that are pegged for the TV show, and is located on a busy road behind SAE.

‘All are under negotiation with offers of $500,000 over market value’.,,,

She also said it is ‘Morally wrong that a reality TV show can come and do this to a community’.

Dorothy says she is concerned that her amenity will be adversely impacted while five homes around her are partly or mostly demolished, and rebuilt, with a constant stream of filming and tradespeople.

‘I was told there was a distinct possibility for these new homes being built as two storey’, she said.

If that happens, she fears it will block her solar access.

‘I was also told, if the production and DAs were approved, they would work throughout the night, providing there were no power tools used’.

Schedule

She says she was told, ‘Demolition would start in February, they would start filming in April and go through till September with an auction possibly in October’…...