THE peak body for local government in New South Wales says rising construction costs, labour shortages, and higher interest rates for loans are all contributing to a “perfect storm” that continues to negatively impact housing supply across the state.
Local Government NSW says the trend is particularly seen in recent dwelling commencement and completion figures.
Local Government NSW president, mayor of Forbes Shire Council, Phyllis Miller, has strongly rejected recent claims from industry bodies that councils are responsible for New South Wales failing to meet housing supply targets.
“Local government is often targeted as the barrier to housing supply, which is simply not true,” Cr Miller said.
“Rather, the lack of housing supply is due to many factors including a decline in the number of development applications being lodged for assessment, not a lack of council action.
“The NSW Government’s council league tables show fewer DAs are entering the assessment pipeline. This is due to a number of economic factors including rising construction costs, labour shortages, supply chain issues, and higher interest rates.
“You only need to look at the phenomenon of ‘Zombie DAs’ to see this playing out,” she said.
According to data from the NSW Department of Planning, Housing and Infrastructure that was analysed by media outlets in December 2024, more than 75,000 dwellings in Greater Sydney alone have been approved but remain unbuilt.
“This backlog is a clear indication the problem is not a lack of approval, but a failure to build,” Cr Miller said.
She said councils acknowledged the release of the Australian Bureau of Statistics small area data to the end of November 2024 that indicated dwelling approvals dropped by 12 per cent in the past year.
However, she said it was important to understand this was not a sign of councils rejecting projects.
“There is no correlating rise in DA refusals so it’s unfair and overly simplified to paint a picture that councils across the board are blocking progress,” Cr Miller said.
“Councils remain dedicated in their contribution towards fixing the housing crisis and have been actively reviewing and improving their assessment processes to support housing growth; many councils and their communities have seen promising results.
“What’s needed now is a more nuanced conversation about the broader economic conditions affecting the housing market and the NSW and Australian Government response to that climate. Local Government is keen to take our seat at the table as part of those discussions.”
