But does regulation-slashing bill fail to address root causes of housing shortage?
NSW’s planning system is set for a big shake-up after the Planning System Reforms Bill 2025 passed both houses of Parliament with overwhelming support.
The legislation, described by the government as “the most significant overhaul of the Environmental Planning and Assessment Act 1979 in a generation”, aims to cut delays, streamline approvals and deliver more homes across the state.
The Bill, which was passed with bipartisan support, “represents a major step forward for NSW housing and planning reform”, said New South Wales Premier Chris Minns (pictured).
“For too long, NSW has been held back by a system that was slow, complex and out of step with the necessity to deliver more homes for those who need them.
“These reforms will help us build more homes faster, in the right places, giving young people and families the chance to access a home.”
Key reforms include:
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Establishing the Development Coordination Authority – a single front door for advice on major projects across NSW government agencies.
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Enshrining the Housing Delivery Authority in legislation to make sure there is an enduring, state-wide focus on housing delivery.
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Expanding Complying Development pathways to enable faster approvals for low-impact development.
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Introducing a new Targeted Assessment Pathway for developments already subject to strategic planning and community consultation.
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Amending the EP&A Act’s objects to include housing delivery, climate resilience and proportionality for the first time.
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Replacing more than 100 consultation plans with a single, state-wide Community Participation Plan.
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Removing unnecessary duplication, including regional planning panels and outdated assessment pathways.
Commenting on the Bill being passed, Minister for Planning Paul Scully said: ““The overwhelming support of the parliament for the Bill demonstrates a shared commitment to tackling NSW’s housing challenges and enabling a modern economy.
“This does not mean that we will take our foot off the pedal. If anything, the real work starts now, and we will be working hard to see these reforms implemented.
“This Bill will enable a planning system fit for the 21st century, one that supports housing and energy delivery, encourages job creation, investment and builds better communities.”
Reducing red tape in the housebuilding industry has been on Labor’s agenda at the national level ever since the Economic Reform Roundtable in August, when Labor pledged to look at Improving regulation and reducing regulatory clutter in order to accelerate approvals in national priority areas.
Among the floated recommendations include pause on changes to the National Construction Code – echoing calls from industry to halt frequent regulatory updates that increase building costs.
Reactions from broking industry
Jon Gawley, managing director of Liverpool-based brokerage Kanebridge Finance, said the decision to pass the Planning System Reforms Bill 2025 was “long overdue”.
“Supply and demand is a massive issue,” said Gawley. Without shortening the application process while making building costs cheaper for developers, “slow supply will always continue”, he added.
Gawley called the bill “a step in the right direction and something which can be built on”, although input costs are likely to remain a lingering concern.
“I'm unsure how much this legislation will ultimately help in lowering building costs,” said William Xin, founder and director of Sydney-based XIN Mortgage.
“I believe that not only the limited supply but also the rapidly escalating building costs are major factors sustaining the current high prices in the property market,” he added.
Construction costs in Australia have indeed continued to soar, with the Cordell Construction Cost Index (CCCI) from Cotality posting a 0.6% sequential rise in the September quarter, marking and acceleration compared to the previous two quarters, which saw increases of 0.5% and 0.4% respectively.
The September quarter saw price increases across most building materials, with metal and related products experiencing the largest gains. “Structural timber remained relatively stable, with only minor increases affecting select items,” said John Bennett, construction cost estimation manager at Cotality.
On the bright side, construction costs grew by 2.5% on a year-on-year basis in the September quarter – this was down from 3.2% in the prior 12-month period.
Demand skyrockets
While the regulation-slashing Bill has been warmly received, the just is out on whether it will be sufficient to match soaring demand-side pressure in NSW.
Expanded government incentives such as the 5% deposit scheme have seen buyers flock to the market, pushing up prices among properties priced below the scheme’s new thresholds, according to Cotality.
Price inflation in Sydney’s Northern Beaches, North Sydney and Hornsby, and Eastern Suburbs has been particularly pronounced.
Australia-wide, dwellings priced below the 5% deposit scheme’s thresholds rose by 1.2%, compared to 1% dwellings priced above the scheme’s thresholds.
“It is also worth noting that it might be too soon for the full impact of the expanded scheme to show up in price growth, and the numbers are worth reviewing over time,” said Eliza Owen, head of research at Cotality. “Ultimately the expansion of the 5% Deposit scheme is one of many factors influencing strong growth at the lower-to-middle end of the market.”
