The budget of the state with the most expensive housing market in the nation has made little inroads to stem an ongoing supply crisis, say critics who are calling for more measures to stoke construction.

NSW Treasurer Daniel Mookhey defended his restrained financial plan that offers minimal new incentives to boost housing supply, instead aiming at helping first home buyers through $20,400 in transfer duty exemptions for purchases up to $800,000.

“We’ve – in our budgets one, two, and three – already delivered the biggest shake-up to NSW planning laws in a generation,” he told ABC Radio National.

“We’ve also funded the biggest investment in social housing since the Second World War.

“In this particular budget, we are focusing on introducing more modern methods of construction.”

A new $32.3 million pre-fabricated and modular construction hub using digital technology will see “homes go from a factory floor onto a site within four to five weeks”, he added.

The budget comes as the federal Housing Minister Clare O’Neil said the nation’s housing market was going through a correction after “extremely high house price growth” before the pandemic.

NSW’s reforms have been labelled modest by property groups due to their focus on championing cheaper and more efficient forms of construction over direct investment.

Investment measures are largely a continuation of existing schemes, despite the state remaining on track to fall short of its target of 377,000 new homes by 2029 under the National Housing Accord.

The Urban Development Institute of Australia called the budget a missed opportunity, saying investment in high-impact infrastructure remains the best way to unlock new homes at scale.

“Unfortunately, the lack of direct investments in supply side initiatives in this budget will make it harder for us to turn around the housing crisis,” the institute’s NSW chief executive Stuart Ayres said.

“We need to see a greater share of the state’s capital expenditure go to supporting investment in new homes.”

But, NSW Housing Industry Association executive director Brad Armitage welcomed the budget measures, despite labelling them restrained in scope.

“Although these measures are modest, they build on existing reforms aimed at increasing housing supply,” he said.

“We still have long way to go to get anywhere near to building the number of new homes needed to meet demand.”

Urban Taskforce Australia, which represents property developers, also pointed to the lack of new support for housing supply in the budget. 

Chief executive Tom Forrest said his members would have liked to see reductions or deferrals of property-related taxes, which he says would result in greater housing supply and improved housing affordability.

The NSW Community Housing Industry Association noted many people remained on waiting lists for government-assisted housing.

For more property stories:

• Few Hunter highlights in NSW Budget, say disappointed local business leaders
• Elevated Newcastle living reaches new heights
• Major community opposition to Wickham’s 43-storey tower

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