If you're going to be in NSW Strata in 10 Years ...

If you're going to be in NSW Strata in 10 Years … you need to read this.

Although strata stakeholders get caught up in the day to day minutiae of running strata buildings, its future as an investment, housing, and business sector depends on government housing policy and property market shifts.  As it’s all about the buildings … stupid.

So, this latest report by the NSW Productivity and Equality Commission Review of housing supply challenges and policy options for New South Wales is critical, since it’s all about the buildings.

There’s a lot in there and it covers free standing as well as multi-dwelling housing, but here are a few of my favourite takeaways.

• NSW wants to build 377,000 new homes by mid 2029 [half of which will be medium and high density]:  That’s a lot of new strata lots.

• That barriers to higher density should be rapidly removed, at recommendation 1.3:  Woo Hoo, so lots more higher density.

• That Government should evaluate past reforms and pause future building reforms that add to construction costs unless there’s an overriding public interest, at recommendations 2.9 and 2.10 1.3:  Uh Ooh, so watch out on those Chandler reforms.

• Dwelling approvals are 50% lower than in 2016 and completed dwellings are down to only 45,000 from 75,000 in 2018: That’s a big drop in new dwelling supply..

• The average cost of constructing new apartments has risen by more than 30% since 2018 from $666,000 to $905,000: Ouch!

These housing growth predictions and targets will be a great opportunity and challenge for the strata management sector. But, the indications of softening of building standard controls as a tradeoff are especially worrying for strata owners and residents.

And, although these are just predictions [which typically never happen as predicted] it’s still a very good indicator of the likely direction that NSW government policies and actions will take.

So, if you’re a strata stakeholder [especially a business operator] and plan to still be operating in the strata sector in 10 years’ time in NSW, I recommend reading this report.