#02 TWENTY SEVENTEEN Developing inspired communities Housing Affordability Special FACE OFF How will the affordability crisis be solved? #04 URBAN ICON IS THE OFFICIAL PUBLICATION OF UDIA NSW Editor: Leo Nelson [email protected] PO BOX Q402 QVB Post Office NSW 2000 T: (02) 9262 1214 F: (02) 9262 1218 W: www.udia-nsw.com.au Publisher PUBLISHED BY: #10 ABN 70010 660 009 Unit 107, 27-33 Nundah St, Nundah QLD 4012 PO Box 406, Nundah Qld 4012 Telephone: (07) 3866 0000 Facsimile: (07) 3866 0066 Email: [email protected] Website: www.tmpc.com.au Views expressed in any article in Urban Icon are those of the individual contributor and not necessarily those of the publisher. The publisher cannot accept any responsibility for any opinions, information, errors or omissions in this publication. 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Other material may be reproduced, but only with the permission of The Magazine Publishing Company. #06 contents 02 President 08 Budget Recap 24 Focus 36 Budget 03 CEO 10 Features 30 Opinion 38 Updates 04 Profile 32 Showcase 40 President's 16 Housing Luncheon 06 Feature Affordability Plan 34 Updates issue 2, 2017 URBAN.ICON 1 PRESIDENT The affordability dilemma Make no mistake, Sydney’s affordability problem has hit crisis levels. We are now the world’s second most unaffordable city behind Hong Kong. It’s certainly a worrying realisation when we tell our kids to study hard, work hard and save, yet we The development industry is the key to solving the know that still won’t be enough to buy a home. UDIA has long predicted this crisis, which is housing affordability crisis, not an ATM. Implementing mainly caused by undersupply. We’ve long said the right policies now, that are developer-friendly will that Sydney needs 40,000 new homes a year to meet population growth – a target that still has ensure the next generation can afford a home. not been reached. But to give credit where it’s due, the NSW Newcastle, Wollongong and the Central Coast to doubled to 8 percent of a property’s value, and Government has been increasing the rate of the dilemma shows just how big the challenge for the land tax surcharge will go up to 2 percent. supply. In May, the state record for dwelling government is. The Federal Government has also acted by completions over a 12-month period was beaten, lowering the foreign buyer withholding tax Demand is also set to rise, following the with 35,871 completions. The previous record threshold to $750,000. I wouldn’t be surprised if introduction of incentives for first home buyers. had stood since 1971. Approvals are even more several development projects are cancelled this The Federal Government will allow up to year due to the increased tax burden. promising, with 70,897 approvals over the past $30,000 of concessional super contributions to year. The approval figure has doubled since be withdrawn to pay for a deposit and the NSW While we have seen a big step in the right 2011, at the same time that UDIA commenced its Government will not charge first home buyers direction, now is not the time to be complacent. Build A Better NSW campaign. stamp duty on homes under $650,000. The development industry is the key to solving the housing affordability crisis, not an ATM. I don’t think the NSW Government is celebrating The difficulty for politicians is having to Implementing the right policies now will ensure the new record in dwelling completions just balance policy with opinion polls. Developers the next generation can afford a home. yet. The previous record was set at a time when and foreign investors are easy targets. The Australia’s population was just 12 million, NSW Government’s 'A Fair Go For First Home half of what it is now. With 1.6 million more Buyers' policy removes the cap on Section 94 people expected to move into Sydney over the contributions and adds the State Infrastructure next 20 years, simply beating records won’t be Contribution to up to 15 new areas. Foreign ARTHUR ILLIAS enough to solve the affordability crisis. Adding investors will have their stamp duty surcharge UDIA NSW PRESIDENT 2 URBAN.ICON issue 2, 2017 CEO # 03 Rising to the challenges 2017 has delivered a very exciting and challenging year for the development industry in NSW. The economy is strong, unemployment is low and the industry is profitable, with revenue from Innovation is crucial for the future of our industry stamp duty proving to be a major dependency for the State Budget’s bottom line. and UDIA is proud to be part of the evolution But unfortunately, the housing affordability crisis through CityLife Labs, which looks to embracing new continues in Sydney and many regional markets. technology that could transform cities into the future. UDIA’s main goal this year has been to offer solutions to the housing affordability crisis. Our However, it is still not enough to solve the housing Sydney, fueling a jobs boom and development. comprehensive action plan Making Housing More affordability crisis. Market productivity needs to The Western Sydney Airport cannot be another Affordable, provides a more detailed strategy be improved so we can keep it going for 20 years Avalon, or a low-cost terminal; it needs to be the to deal with housing affordability than anything and increase supply to deal with the backlog of ‘anchor’ for the third Sydney CBD. That’s why offered publicly by government or industry to date. demand for more than 100,000 dwellings. it is so important for Government to invest in infrastructure now and commit to a North-South Some of the challenges our industry is facing Innovation is crucial for the future of our industry railway link that will create a conurbation which this year include APRA’s order to reduce the and UDIA is proud to be part of the evolution leverages our existing cities to connect with the number of interest-only home loans; the State through CityLife Labs, which looks to embrace ‘Aerotropolis’ as an economic engine. Government uncapping Section 94, doubling new technology that could transform cities into the foreign land tax and stamp duty surcharges the future. Around the world we can see how great airports as well as introducing complicated biodiversity One of the ‘Labs’ from CityLife is the Polycentric bring not only prestige, but enormous economic laws; and the Federal Government lowering the Sydney: Not Yet report, which has given new insight growth to the regions they serve. The Western withholding tax threshold. into how CBDs form and why the Sydney CBD is Sydney ‘Aerotropolis’ can become world-renowned Perhaps one of the biggest challenges will come so dominant in terms of employment. We need as an example on how to create ‘global liveability’. from a something Australia cannot control: to understand this challenge if we are going to The third CityLife Labs project is the Urban the Chinese Government. Beijing’s recent successfully build the Western Sydney Aerotropolis Pinboard, which is an app that allows anyone crackdown on capital leaving China could have a and improve Sydney’s affordability. to see a 3D map of their community, with an profound effect on the investment landscape in The simplified answer the Polycentric Sydney illustration of every development proposal. Australia, forcing developers to recalculate. research found, is that CBDs have the Developers will be able to access a broader range In some ways, our industry faces a brewing storm. biggest ‘amenity’ – the most transport, bars, of community views without the public having to Along with more taxes and less investment, a restaurants, jobs, networking opportunities etc. interpret complicated maps, lengthy community possible cash rate rise is looming after more than The connection is so strong, that most Sydney consultations, petitions and the common dramas a year of being at a record low of 1.5 percent. CBD workers would not take a job closer to we experience. People will be able to connect with However, with the appreciation of the Australian home unless their commute was longer than urban planning to see the proposal on the GIS map dollar by 7 percent over the last few months to 45 minutes. The ‘hard’ evidence in another and type in a comment, so planning authorities will the time of writing, the RBA will be very unlikely CityLife report, Big Data Insights, confirms these be able to see exactly what people are thinking. findings, with transport data showing a clear to increase interest rates whilst it remains Urban Pinboard is the next big ‘thing’ in attraction towards the CBD. strong and family debt remains high. In the development planning and I encourage Financial Review, AMP Chief Economist – Shane If 1.9 million people are going to live west of the everybody to have a look at the ‘beta’ version at Oliver said that RBA officials were: M7 Motorway in less than 20 years’ time, how urbanpinboard.com.au/app can we ensure that the problems of congestion, "Clearly stepping up their efforts to try As you can see, there is so much currently long commute times and their associated social and jawbone the $AUS lower, as Dr Lowes happening in the world of urban development, statement effectively says that a stronger problems don’t deteriorate? and in NSW we are sitting in the front row.