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Transforming state agency approval processes can cut costs on new housing

A new report has found that fixing inefficiencies in the approval of major housing projects by state agencies could unlock $360 million in economic value and help ease pressure on house prices.

The report – commissioned by the Property Council of Australia’s Residential Development Council (RDC) – tests the state of major project approval systems around the nation.

“A continuous pipeline of supply is essential if we are going to tilt the balance firmly back in favour of homebuyers,” said Andrew Whitson – President of the Residential Development Council and Stockland’s CEO - Residential.

“Giving major greenfield and urban renewal projects a clear roadmap through the maze of state agency referrals and approvals will create more certainty for the industry and the community.”

The report sits alongside prior research commissioned by the Property Council, including the 2015 Development Assessment Report Card, and incentives framework to fix planning systems and housing markets.

Its release coincides with the launch of a new report into housing affordability by the Grattan Institute which highlights the critical importance of building more new homes and improving planning systems in order to bring down house prices.

Property Council Chief Executive Ken Morrison said reforming planning approval processes is a central part of the solution on housing affordability.

“Mapping the inconsistencies and inefficiencies of major project approval systems across the country puts a spotlight on the need for change,” said Ken Morrison, the Property Council’s Chief Executive.

“State agency approval systems largely remain slow and complex – requiring developers to navigate multiple referrals and review points.

“We are needlessly adding to the time, cost and red tape of new housing – and these are baked into the price of new housing.”

The report benchmarks states against key design elements of good planning systems, namely:

  • The need for a single point of assessment on applications
  • Referrals being limited to agencies with a statutory role
  • Referrals should be for advice only
  • Direction should only be given where it avoids the need for a separate approval process
  • Strict timelines for responses and approvals need to apply and agencies should specify requirements in advance.

“The Queensland system known as SARA (State Assessment and Referral Agency) is seen as the benchmark – but a number of improvements can still be made there,” Mr Morrison said.

“Most other states are a long way from the mark – and crucially, the nation’s biggest market, NSW, has one of the worst systems in the country.”

Mr Whitson said: “Governments have zeroed in on housing affordability and better co-ordination of state agency approvals gives them a further chance to make meaningful progress.

“Streamlining approval processes will help us deliver the housing supply and diversity needed across the country.”

A copy of the report is available at https://files.propertycouncil.com.au/hubfs/_RDC/WebFiles/RDC_CuttingTheCosts.pdf

Media contact:  Fiona Benson | M 0407 294 620 |  E fbenson@propertycouncil.com.au