Despite a surge in dwelling approvals and higher expectations for housing construction, property growth in NSW is expected to moderate in 2017-18, according to the NSW Treasury.
These results were published in the NSW Budget 2016-17 Half-Yearly Review
which was released yesterday (13 December).
The report also detailed the state’s performance in the property market which included a historical high of 74,600 new homes approved over the past year. This was up from 34,600 in 2011. Furthermore, a record 1,300 new homes are currently being completed each week.
The Treasury also spoke of the risk that high relative Sydney property prices – combined with low interest rates and insufficient levels of supply between 2006 and 2012 – could drive stronger interstate migration outflows and slow population growth.
However, it said the record number of housing completions expected over the short-term could support affordability over time.
“Housing affordability remains a major focus of the NSW government. Boosting supply is the most effective way for governments to make houses more affordable, and the latest signs from the housing market are encouraging.”
In the seven years prior to 2013, the average number of dwelling completions was less than 30,100 per year. After 2013, this increased rapidly reaching 52,800 over the past year.
“Historically high approvals and commencements have resulted in a large pipeline of work that will see completions outstrip recent record highs over the next two years,” the Treasury wrote.
This is expected to ease current housing undersupply in NSW (which the NSW Intergenerational Report estimates sits at 100,000) and reduce pressure on house prices.
Sydney’s geographically dispersed housing stock will also provide more choice for homeowners and will ease cost of living pressures for NSW residents, the Treasury said.
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