New Zealand could do well to look at the New South Wales government example of support which will cut housing road blocks and red tape and help bring construction forward.
“This will bring forward the construction of homes, offer greater certainty for our building industry and reduce the level of risk in the financing sector, says Minister for Planning and Public Spaces Paul Scull.
“We have more than 13,000 homes sitting there approved but construction has not commenced. This is bad outcome for our housing delivery, our economy and our communities.
“We’re checking capacity, credibility and capability, we want good quality homes from reputable builders, and we want them soon.”
Developers, builders and their projects that meet the criteria have been invited to submit an expression of interest to join the programme.
Eligible applicants can apply to have the government commit to purchasing off the-plan dwellings in eligible residential developments to help secure finance.
The government has already introduced a range of reforms to increase the number of homes entering the system and speed up assessment timeframes, but getting homes built is the next big challenge, it says.
“This guarantee will give lenders greater confidence, reduce risk in the housing finance market and accelerate the delivery of new homes across NSW” says Planning Treasurer Daniel Mookhey.
“This is about turning approvals into actual homes, supporting jobs, boosting housing supply and strengthening the state’s economy at the same time.”
Under the five-year initiative, the government will leverage its strong fiscal position to commit to buy up to 50 percent of homes off the plan in approved housing projects.
Eligible homes will be valued at up to A$2 million each, with support ranging from A$5 million to $50 million per project. Up to A$1 billion in pre-sales will be committed over the life of the project, through the use of a revolving fund.
As homes are sold and projects are completed, builders will have the option to rescind the commitments, releasing the funds and allowing the program to bring more homes forward for construction, or call on the guarantee, where the homes are then purchased by the government at a discounted rate and either rented, or sold into the market.
The challenge of meeting pre-sale requirements is one of the most common issues cited by stakeholders in securing finance and has been outlined as a key hurdle for industry in the state’s Productivity and Equality Commission’s Review of housing supply challenges and policy options for New South Wales.
In the past five years, the time between approval and commencement of new apartments has increased 39 percent, from 5.6 months to 7.8 months, and in NSW there are more than 13,000 developments approved but not commenced.
