Sydney is entering a “golden decade” of housing growth, with no bubbles in sight, according to Stockland, one of the biggest residential developers in the country.
Chief executive Mark Steinert said the “gross” undersupply of homes will not see Sydney hit market equilibrium for at least another five to six years.
Speaking at the Committee for Economic Development of Australia (CEDA) function in Sydney on Thursday, Mr Steintert said while affordability was definitely an issue, the undersupply of housing in Sydney and, to a lesser extent, Melbourne was “mission critical”.
Mr Steinert said there is a “gross” undersupply of homes in Sydney. “I do not see that Sydney has a property bubble and the state is not susceptible to ‘pop’ any time soon,” Mr Steinert said.
“The issues that must be addressed are changing the ‘not-in-my-backyard’ mentality,’ where developments are proposed but then face community opposition. That causes major delays in getting new projects approved.”Of course, we welcome community consultation but it elongates the process.”Once that outlook is altered, we can address supply and that will then lead to addressing the affordability problems.”
Mr Steinert, who is the new president of the Property Council of Australia, said within NSW the markets differed, with the Illawarra region showing solid growth in demand and pricing, Sydney is about high density in the city, while the Hunter Valley has been slow.
Stockland has focused on boosting its residential business in the past decade, and this year alone has announced a proposed $4.6 billion development at Kalkallo, in Melbourne’s northern growth corridor. This was in addition to the announced acquisition of residential-zoned land at Scarborough in Brisbane for $67 million, and at Clyde North in the urban growth corridor of Casey, south-east of the Melbourne CBD, with a development cost of $128 million.
The land acquisition reflects the group’s ambitions for expansion in residential development.Mr Steinert said the group’s new masterplanned community at the heart of the northern growth corridor in Melbourne would eventually become a city in its own right.”The various state governments are also helping with release of land supply for redevelopments along with new infrastructure, lower interest rates and general economic stability,” Mr Steinert said. “The property sector is one of the larger taxpayers in the country, so it’s important to have efficiencies and increased productivity.”
He told the 300-strong property crowd that diversity of housing is also needed, and that comes down to planning.
“NSW must catch up. Our smallest property size in NSW is 280 square metres, Victoria is 104 square metres, Queensland 118 square metres and WA is 188 square metres. Australia is a high-cost producer but our productivity is low.”
John Mulcahy, chairman of Mirvac Group, has echoed the same sentiment, also saying he did not see a housing bubble in Australia.
He said recently that the high documentation and structure of lending meant that it was unlikely to see a housing “crash”.