Number of homes actually built in Illawarra lags behind approvals

Regional Development Australia Illawarra (RDA Illawarra) figures suggest the region will suffer a shortfall of up to 13,000 homes by 2041 if completion rates don't rise, based on the numbers of the last 10 years.

The organisation says the region has had on average, over 2300 approved development applications (DAs) each year over the past four years but this is not reflected in the number of dwellings actually constructed and completed.

RDA Illawarra chief executive officer Debra Murphy said that in the 10 years to 2021, 79 per cent of approvals translated to liveable dwellings - an average of 1539 each year.

However, the annual target of 2200 is necessary to meet the projected population increase of 45,000 by 2031 and 90,000 by 2041.

Recent figures from the NSW government show completions were down 15 per cent in the 2022-23 financial year across the Illawarra and Shoalhaven regions.

Already the Illawarra is in the grips of a well-documented housing crisis, with a dire shortage of affordable homes.

"While the COVID years negatively impacted the construction of homes, even post-COVID our best annual result for completed dwellings was just over 2150 in 2021. That's still below the target of 2,220 each year," Ms Murphy said.

"Only sustained completions at the historically high rate achieved in 2021 would see the Illawarra reach its 2041 target."

She said the reasons for this were complex and could include such factors as the costs of greenfield projects for developers (such as development contributions), a lack of skilled workers, and supply chain issues.

Ms Murphy said the planning system "almost needs a whole renewal", but there was no one single bullet that would solve the problem.

RDA Illawarra has proposed such options as build-to-rent developments, concessions for affordable housing, and higher density housing around transport hubs.

Ms Murphy said higher density projects allowed developers to deliver more housing for their money.

Without boosting the number of dwellings actually built, the projected population growth cannot be realised.

Ms Murphy said the region risked losing migrants to other areas; already, RDA Illawarra had received calls from people on temporary skilled migrant visas who said they had to go elsewhere because they could not find an affordable place to live.

She said fly-in, fly-out (FIFO) workers were already working in the region, but she questioned whether that was sustainable.

"We've got a massive pipeline of investment potential here over $30 billion," she said.

"And will we have the people to deliver those projects?"

Without economic growth, Ms Murphy said, the Illawarra could simply become a commuter suburb for Sydney.