NSW Apartment Shortage
The Reserve Bank of Australia has released a new report titled The Apartment Shortage which identifies the excessive costs created by the NSW planning system.
It explains that the resultant shortages in supply is driving up prices, and has been accepted by experts such as Urban Taskforce CEO, Tom Forrest.
Mr Forrest said, "the additional costs are due to the excessive time taken to obtain approvals in the NSW planning system and the high degree of risk associated with approvals, despite the strong demand for new apartments."
"Given the economic shock created by COVID-19, there is an opportunity for the NSW Government to cut housing prices by approving more supply and allowing for more height."
The fact remains that the planning system had slowed considerably even before COVID-19 hit. Planning approvals, particularly for apartments, have now fallen off a cliff. As with any product, low supply will eventually lead to price increases.
Loan volumes bounce back
New investor home loans outpaced owner-occupiers in June, with both bouncing back following the historically large falls in May.
The ABS reports that new loan commitments for housing rose 6.2% in June, reflecting $17.4 billion in total lending, made up of...
First home buyer loan commitments increased by 3.3%.
Owner-occupier loans increased 5.5% to $12.9 billion for the month.
Investment loans increased by 8.1% to $4.4 billion, marking the first sign of growth in the investor sector of the market since the end of 2019.
The banks appear to be doing their job, and the State and Federal Govts have also done a terrific job in response to this economic crisis.
That just leaves the Councils and planning authorities to lift their game. In fairness, they have started to fast track projects, but they still have a long way to go.