Minns challenges Australian Dream to address NSW housing shortfall

New South Wales Premier Chris Minns (pictured) has unveiled a suite of reforms designed to speed up housebuilding in the state amid a widening shortfall of the 2022 National Housing Accord.

Under the National Housing Accord, NSW has committed to delivering 377,000 new homes over five years starting from July 2024 – a figure that equates to 75,400 new homes per year.

Yet recent data shows the state is falling well short.

NSW Treasurer Daniel Mookhey last month revealed the state is on track to build just 50,000 homes this financial year, leaving a significant shortfall of around 25,000 homes annually.

That gap is even more concerning given NSW’s population growth and ongoing housing affordability issues, especially in Sydney.

Minns’ proposed changes include the introduction of a new ‘pattern book’ of pre-approved building designs for low- and mid-rise homes, as well as streamlining planning pathways for modular and prefabricated construction.

The reforms are aimed squarely at reducing build times, cutting red tape, and unlocking more “missing middle” housing – particularly in urban infill areas close to jobs, schools and transport.

Big prefab push

The Commonwealth Productivity Commission estimates that modular and prefab homes can reduce construction costs by up to 20% while being up to 50% faster to construct.

Yet “for too long, NSW has been let down by building approvals systems that are slow, outdated and have not kept pace with the need for housing across our state”, said minister for housing Rose Jackson.

The Government’s proposed legislative amendments include:

• Removing duplication between building and planning legislation

• Enhancing certifier accountability

• Streamlining building and occupation approvals

• Modernising the building regulatory system

The proposed reforms will also introduce stronger conflict-of-interest laws for certifiers and a huge increase in penalties for breaches of these laws.

“These reforms will remove barriers to prefabricated and modular housing without compromising building quality, allowing more people to take advantage of the benefits of modern methods of construction,” said Jackson. “These are no longer fringe options – they are central to how we build the homes of tomorrow and the Minns Labor Government is proud to be leading the way in Australia.”

Homes NSW – the newly formed umbrella housing agency – will spearhead pilot programs and land audits to identify government-owned sites suitable for modular builds.

Betting on mid-rise builds

The Minns government is also placing its bets on mid-rise dwellings with the release of nine architect-designed mid-rise apartment building patterns.

These designs range from between three to six storeys and are in addition to the eight low-rise home patterns released earlier this year.

“The new housing patterns are more than designs for beautiful homes. They are a practical way we are delivering more homes for young people and families across New South Wales,” said Minns.

“We are leading the world with the use of pattern books to drive the delivery of new high-quality and affordable homes faster by cutting approval delays and making quality designs more accessible,” he added.

Against the court of public opinion

While these above brainchildren of the Minns government, which were released over the past two days, are progressive, it will be an uphill battle to sell them to the general public.

There is a persistent pricing gap between median house values and median unit values across Australia, with Sydney having among the widest chasms.

According to Cotality, Sydney houses command a 76% premium over units – the largest gap in the country. This has risen from just 35% in 2020.

There are many possible readings of this data, but one popular conclusion is – Australians just don’t like living in apartments.

After all, the archetypical Australian Dream is for a big detached house with a backyard.

When Tim Lawless, executive research director at Cotality, recently discussed Australians’ preference for larger, detached houses, he said: “I would have expected that as housing affordability becomes so stretched, there would be more deflection of demand towards the multi-unit sector, as well as the fact that supply levels across the multi-unit sector tend to be quite low as well.

“But the reality is most capital cities are still seeing detached housing values rising at a faster rate than apartment prices, despite the fact that there is a substantial affordability difference between the two product types.”

His conclusion?

“I think the attractiveness of the apartment sector probably comes down to affordability, but we still see Australians having a preference for space, a preference for a detached home with a backyard."

While Lawless believes that apartments have some efficiencies like capitalising on existing infrastructure and providing relatively affordable housing in well-located areas, “at the end of the day, demand largely skews to detached houses, limiting their feasibility”.

There is also the NIMBY (Not In My BackYard) contingent that is pushing back against mid-rise construction in their neighbourhoods.

In the most closely watched ongoing case, residents of beachside suburb Mosman are pushing back against plans for higher-density apartment blocks in the affluent postcode.

The NSW government’s proposal to build up to 10,000 new homes by rezoning land around Woollahra and Edgecliff stations is also facing NIMBY backlash.

Mid-rise apartments create community cohesion

Despite the challenges in swaying public opinion, Abbie Galvin, head of Government Architect NSW, believes in the benefits of mid-rise living.

“Mid-rise apartments strike a balance between compact living and community connection,” she said. “These designs enhance neighbourhood character while meeting the needs of diverse households… Architecture plays a vital role in shaping places people want to live. These designs offer a clear pathway to delivering quality homes that contribute positively to the urban fabric.”