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Do housing approvals equal houses built?

7 November 2017

NSW experienced it 45th consecutive month of record housing approvals, but REINSW President John Cunningham warned that the ‘true test is yet to come’.

Figures released this week by the Australian Bureau of Statistics showed that NSW had 68,945 new homes approved in the past 12 months to September 2017.

Greater Sydney saw 36,097 approved dwellings - an 18% increase in the 12 months to August 2017, compared to the previous 12 months. Since June 2011, the number of homes under construction has increased by 156%.

Approvals need to appeal to first homebuyers and downsizers


Mr Cunningham said the true test of the approvals figures is ‘how many get built’ because ‘many projects will be put on hold due to changes in market conditions’.

He explained: “The real test will come when we see what is built and if it appeals to both first homebuyers and downsizers, who are the key to a vibrant market place.

“If the approvals are directed at investors then we may see a glut of more high-rise apartments that are primarily built to rent.

“On the surface the figures are encouraging, but we can only hope the current shortage gets filled before we get further population surges.

“The reality of the market place is that the majority of transactions for first homebuyers are for established homes and not new dwellings. So, before we celebrate, let’s wait and see if the approvals get off the ground and they’re products the market needs and wants.”

Minister for Planning and Housing, Anthony Roberts, said the strong housing approvals would ensure there was enough homes to accommodate an extra 2.2 million people expected to live in NSW over the next 20 years. 

He added: “It is important that we continue to enable first home owners to enter the market – and that is achieved through supply.

“As government, it is essential we prepare for the future by ensuring our children and grandchildren will have the opportunity to own their own home.”