New research reveals government taxes and charges, and slow planning approvals, will derail the five-year Housing Accord targets in the Hunter and Central Coast.

In fact, as the Property Council of Australia calls for a temporary suspension to the Housing Productivity Contribution (HPC) and water authority Development Servicing Plans (DSPs), numbers show this region will fall short of its goal by 12,000 homes.

The Release the Pressure – Hunter and Central Coast report is the final instalment of a three-part investigation into the impact of new taxes and charges on development and building costs.

It comes coupled with an examination by global real estate firm Savills, who modelled the project viability on the construction of housing subdivision (greenfield) and residential developments (infill) in the Lower Hunter.

The research found no greenfield or infill were financially viable with HPC and DSP charges in place and a typical development assessment time of 18 months applied.

According to the Property Council’s report, taxes and charges make up 15% of greenfield development costs in the Lower Hunter.

It’s led the organisation to seek a delay of the HPC and DSP fees.

Property Council Hunter and Central Coast regional director Amy De Lore said the re-introduction of the schemes in July was untimely.

“The government is introducing these new charges at a time when the economic environment is very challenging for people looking to develop or build housing projects,” she explained.

“We’ve got high inflation, high costs of materials and labour… it’s very difficult to finance and this is just an additional impost.

“While they can’t control a lot of those external factors, the state government can control these two charges.”

The report notes if the federal government adopts its recommendations, “up to 23,000 new homes could be delivered in the Lower Hunter and Greater Newcastle by 2029”.

Release the Pressure: Hunter and Central Coast – key findings

• Taxes and charges make up of 15% of greenfield development costs in the Lower Hunter and 20% in the Central Coast
• Taxes and charges make up and about 7% of infill development costs in both the Lower Hunter and Central Coast
• Under the current ‘base case’ scenario, about 18,500 new homes will be delivered in the Lower Hunter and Greater Newcastle by 2029 – 11,900 fewer than the Housing Accord target – while around 5,600 new homes will be delivered in the Central Coast by 2029 – 3,800 fewer than the Housing Accord target
• By adopting the recommendations of the report, up to 23,000 new homes could be delivered in the Lower Hunter and Greater Newcastle by 2029 and up to 8,750 new homes could be delivered in the Central Coast by 2029

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