Property Council NSW Executive Director Anita Hugo said the NSW Treasury Housing and Productivity Fund Financial Report for 2024-25 was both a warning sign and an opportunity.
"We have long made the case that you cannot fund roads, pipes and schools off homes that never get built. To the end of June 2025, the Fund collected just $39 million of its $1.5 billion four-year forecast because the underlying pipeline is smaller than predicted," Ms Hugo said.
"Our 'Release the Pressure' feasibility work with Savills identified this problem more than a year ago. The task now is to reset policy settings, so more Housing Accord-period projects move from spreadsheet to construction site.
"While we recognise the Housing and Productivity Contribution (HPC) was always going to have a lead-in period, the feasibility evidence suggests the remaining two-year task to reach the $1.5 billion forecast now looks increasingly optimistic.
"We also recognise the State is continuing to fund infrastructure through legacy special infrastructure contributions, voluntary planning agreements and other programs. Today's news shows why that agenda now needs to be deepened and targeted through a feasibility lens.
"The NSW Government deserves credit for the reforms introduced this year to support housing delivery and growth. Industry is committed to working with government to further alleviate pressure by ensuring workable investment settings," Ms Hugo said.
Savills research commissioned by the Property Council found that:
- On current settings, Greater Sydney is on track to deliver only around 133,000 homes during the 2024-29 Housing Accord period – about 41 per cent of Greater Sydney's target.
- Government taxes and charges account for between 24 and 40 per cent of greenfield development costs in many parts of NSW.
- Representative apartment and greenfield projects in key markets, including in Western Sydney, Illawarra, Central Coast and Lower Hunter, are uneconomic.
"These costs include Sydney Water development servicing plan (DSP) charges that can add tens of thousands of dollars per lot, the HPC of up to $12,000 per dwelling, and council contributions above $60,000 per lot in some LGAs.
"To 30 June 2025, the fund has raised about $39 million against a four-year forecast of $1.5 billion. That gap is the result of a cost stack that makes standard projects unviable. You cannot collect contributions on projects that never commence," Ms Hugo said.
"We support fair, well-designed contributions to pay for local and state infrastructure. But when you add the HPC to Sydney Water charges, local levies and higher construction and finance costs, otherwise typical projects no longer clear feasibility hurdles across many markets.
"Savills found that many infill apartment projects are financially unviable even before you add new costs like the HPC and recent DSP increases. This is not just a timing issue. It is a feasibility issue that needs a fresh and measured policy response," she said.
The Property Council is proposing a focused package for the Housing Accord period to 2029 that complements existing government initiatives, calling for moves to:
- Reset new state imposts for Accord-period projects by suspending or sharply recalibrating HPC and recent Sydney Water DSP increases for qualifying projects and shifting HPC payments to occupation certificate.
- Create a works in kind framework that supports developers to deliver growth infrastructure ahead of schedule to deliver new homes and employment precincts.
- Prioritise investment in housing and employment-enabling infrastructure in growth areas, informed by an updated Employment Lands Development Monitor and draft Infrastructure Opportunities Plans.
"We want to work with the government to turn these numbers around. If we put feasibility first for the Housing Accord period, we get projects that stack up, homes built, serviced industrial land to support jobs, and a larger, more reliable stream of revenue to pay for the infrastructure communities need," Ms Hugo said.
