Business Insights | Breaking the bottleneck and solving NSW’s housing crisis

Right now, the housing market in New South Wales is at a tipping point. Construction costs are rising, premium locations are commanding top dollar, and the gap between supply and demand is only growing.

As Senior Director of Development in Capital Markets, I’ve seen the challenges and the opportunities up close. The latest 2025 data shows a worrying trend: Housing approvals, especially for apartments, are lagging. And the time between approval and completion is stretching longer than ever.

What’s holding housing back?

• Construction costs are climbing: Labour shortages, material price hikes, and supply chain disruptions are squeezing margins and stretching timelines. Developers need to understand these pressures to make smart, viable decisions.
• Location still drives value: Buyers are paying a premium for top-tier locations - those with views, amenities, and strong resale potential. Meanwhile, areas under $13,000/sqm are struggling. Identifying and unlocking premium sites is key to higher returns.
• Approvals are too slow: Despite signs of recovery, new housing stock isn’t keeping pace. Long delays between approval and delivery are compounding the problem. There’s a need to streamline the path from planning to completion.

Understanding the housing system

• The current development process is complex. From land identification to zoning and environmental approvals, the process is long and often delayed by red tape. Streamlining approvals can unlock faster delivery and better outcomes.
• Infrastructure is lagging. In many of Sydney’s growth centres, infrastructure isn’t keeping up with demand. Roads, utilities, and services must be in place before homes can be built and without coordination, projects stall.

Solutions to improve housing

There are strategies to reducing lag times. These can include early ongoing engagement with councils and utility providers, pre-approvals in high-growth areas, public-private partnerships for early infrastructure and incentives for fast-tracked developments.

Integrated planning is also essential. The NSW State Infrastructure Strategy 2022–2042 calls for aligning infrastructure with development. When infrastructure and housing move in sync, everyone benefits.

Why this all matters

A 1% drop in interest rates can drive an 11% increase in property growth.

According to Sameer Chopra, CBRE’s Head of Pacific Research: “Collectively, this wealth effect will add circa $860 billion of income over the next decade, a significant proportion of which is likely to be directed towards housing and living.”

And with every million of new residents, Australia needs 4.5 million sqm of industrial space and see $15 billion in additional retail spending.

Where we go from here

The NSW housing market is under pressure, but the path forward is clear. By addressing construction costs, unlocking premium locations, and fixing the approval and infrastructure bottlenecks, we can deliver the homes our communities need.

The challenge is real. But so is the opportunity. There are ways to build smarter, faster, and together.