Planning Reform and Unlocking NSW’s Housing Future

NSW is at a critical crossroads. 

The median house price in Sydney now sits at around $1.5m, more than double what a person on the median salary can afford. Based on a reasonable financial commitment of 30% of disposable income, the ‘affordable’ mortgage range sits closer to $600-$700k.

What does this mean for the state and for first home buyers?

It means it’s creating a lot of pressure on young people, and they’re considering giving up on the Australian dream of owning their own home. Young people are being forced to make tough choices: 

• Move further west where prices are lower, away from the communities they grew up in.
• Rentvesting, where they rent in a preferred suburb and buy an investment property somewhere more affordable. 

Inevitably, this will force those in lower income brackets further from the city centres – further from jobs, healthcare, and education. While the pressure on already suffering and out-dated social housing continues to mount.

At the UDIA NSW State Conference, The Hon Chris Minns, NSW Premier made it clear: the housing crisis is a multi-generational issue. 

It’s not just the younger generation who are affected. Women over 55 are now one of the fastest growing demographics experiencing homelessness. While younger men remain the largest group within the homeless population, this shift signals deeper structural inequities in our housing and planning systems.

This has long term implications for NSW, and it’s in the State’s best interest to fast track planning incentives and stabilise the housing market.

The Urgency Behind Reform

Young people are leaving the state for more affordable housing in other states. This exodus affects our future workforce, our service industries, and ultimately our tax base. 

Losing the next generation means losing the energy, knowledge, and productivity that we need for our state’s growth. At the same time, we have an ageing population that will increase demand for health, suitable housing, and community infrastructure. Our dependence on today’s youth will only grow larger with time, reaffirming the need to keep them here and that starts with housing.

Streamlining Supply with Planning Reforms

On 17 September, Premier Chris Minns and Planning Minister Paul Scully announced bold reforms to the NSW planning system. It was the most significant overhaul of the EP&A Act in nearly 50 years, that will translate into sustainable, well-planned communities where housing is delivered efficiently and responsibly.

The reforms involve streamlining approvals, prioritising housing delivery, and embedding climate resilience in the planning framework. NSW is committed to delivering 377,000 new homes by 2029. The changes to the EP&A Act support the reduction of complexity and bottlenecks in the system to unlock supply and ease housing pressures across the state.

In addition, the government has established the Housing Delivery Authority (HDA) and Development Coordination Agency (DCA) as part of its planning reforms. 

The HDA is a proactive initiative toward addressing supply issues. Its purpose is to lead a new approval pathway for major residential developments, delivering the homes that young people, families, and workers need. 

The DCA would act as a centralised approval and referral body on behalf of various NSW Government agencies that provide concurrences, referrals or general terms of approval for integrated developments. The DCA aims to streamline decision-making, reduce duplication and bottlenecks, and shorten assessment timeframes, delivering a more efficient and coordinated approach to development assessment.

This is encouraging news:

• Developers benefit from clarity of process and faster approvals.
• Planners gain better alignment between infrastructure and planning.
• Councils can focus on smaller community led applications.

However, as with any reform, implementation will take time and inter-agency coordination and local government capacity remain key challenges. 

Financing the Future of Housing

Infrastructure is still a major constraint. Land developments and housing projects rely on roads, utilities, and transport connections, but these are often needed before developer contributions are collected. Cashflow is a growing concern as agencies must deliver multi-billion dollar projects upfront before receiving any funding.

To address this, reforms to institutional financing have been recommended to unlock new funding mechanisms. This includes using superannuation funds to create opportunities for reputable agencies seeking additional funding for housing delivery.

As outlined in IFM Investors’ ‘Investing in Australia’s Housing Blueprint (2024):

“Policy settings that enable just 0.5% of A$3 trillion industry super assets (by 2030) to be invested in social and affordable housing would see over $15 billion invested. This could help deliver around 100,000 additional social and affordable homes - while delivering strong, risk-adjusted returns for members.”

What Can We Achieve Now?

There are two ways we can take advantage of the new planning reforms immediately, and all they take is a mindset shift: 

1. Community acceptance of apartments and apartment living. 

We can change the perception that apartment living is a compromise. When done well, apartment complexes can foster connected, walkable communities that are environmentally friendly.

2. Government culture changes from prevention to enablement.

A shift by the Government from a development prevention mindset to one of responsible growth that balances community voice with the urgent need for supply.

In Conclusion

Increasing housing supply is a planning challenge that will shape NSW’s future prosperity. And right now, we have an opportunity to reshape the way we plan, fund, and deliver housing. If NSW can deliver the promised 377,000 new homes by 2029, the benefits will extend beyond housing supply. We will have succeeded in revitalising local economies, retaining young talent, and restoring the Australian home ownership dream.

If you want to talk to someone about your next urban planning project, don't hesitate to contact @Jessica Rippon at j.rippon@theoriongroup.au