Sydney south-west suburbs lead the way in new home builds

Buyers in the market for a brand new home could have timed their purchase just right. Building approval rates have soared to record highs. This solid construction pipeline is showing no signs of waning.

The Australian Bureau of Statistics reported almost 4000 housing starts across greater Sydney in the March quarter, jumping 5.2 per cent compared to the same period the year prior. The figure adds to almost 13,000 new homes approved over the current financial year.

Certain pockets of Sydney are a hive of activity. The highest share of construction is in the south west, at just over one-fifth of all house approvals this financial year.

It is the Cobbitty-Leppington area — comprising Leppington, Gregory Hills, Gledswood Hills, Oran Park and Cobbitty — that had the largest proportion of activity in the south west, at 1183 homes.

This area had the fastest population growth in NSW – a whopping 27.6 per cent in the 2016 financial year. The latest approval rates strongly suggest the area is likely to retain this crown.

Blacktown remains one of Sydney’s dynamic areas of growth, accounting for almost one-fifth of home approvals throughout the current financial year. It is a region that already leads Sydney’s housing boom.

Parramatta and Bayside are the only local government areas to have more dwelling completions than Blacktown, according to the latest figures released by NSW Planning and Environment.

Sydney’s housing affordability constraints persist even in the wake of new home completions hitting the highest level in 45 years. The Minister for Planning and Housing anticipates new home completions will reach an all-time record later this year.

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A robust construction pace is needed to adequately provide housing for the additional three million people projected to reside in Sydney by 2056, jolting the population to a staggering eight million.

Mid- to high-density dwellings seem to be the favoured option. ABS figures show unit starts jumped annually a solid 11.5 per cent to 8405 approved in the March quarter, equating to almost 31,000 unit building approvals over the current financial year.

Sydney’s unit development hub is located in the city and inner south with just over 5500 starts approved this financial year. The high-density suburbs of Waterloo-Beaconsfield experienced a population jump of 7.9 per cent during the 2016 financial year. High-density living in Waterloo-Beaconsfield looks set to intensify with just over 2000 unit starts approved this financial year, a large chunk of the total approval rate in the city and inner south.

Parramatta is also one to watch. Public and private sector dollars will continue to transform the area over the next few years. Property development underpins the diversification with just over 4400 units approved this financial year.

Providing affordable housing supply remains the crux of Sydney’s building boom. Though many analysts wager a slowdown in home building is imminent, ABS figures show otherwise. The federal government housing affordability package is promising to unlock supply. If this is delivered, further new developments could be on the cards.