The Laws of Arithmetic
Former Prime minister John Howard famously said that politics “is remorselessly governed by the laws of arithmetic".
The same can be said of house prices. When population growth outstrips the number of new homes being built, prices skyrocket. It’s simple supply and demand.
And the Hunter’s numbers are eye-watering. In the first decade since housing targets were set, we have come up over 23,000 homes short.
Annual approvals over the past decade averaged just 2,270 – against a target of 4,600. Within the next decade, our cumulative shortfall will hit 30,000 homes.
But wait. There’s more!
NSW Planning Minister Rob Stokes was in Newcastle last week to announce the Hunter’s population estimates had been ratcheted up. The current forecast is for the Hunter to grow by an extra 11,700 people to 810,000 by 2036.
Potentially, that’s great news for the regional economy. But unfortunately, the Minister had no solutions for the Hunter’s chronic housing shortage. Nor has he released the long awaited Hunter Growth Plan to give investors more certainty.
That makes it safe to assume that the affordability crisis has just deepened. With the population now growing at a faster rate, and in the absence of any policy response from the NSW Government, demand is edging further ahead of supply. Prices will continue to rise and housing will become less affordable.
It’s those remorseless laws of arithmetic again.
They represent the biggest risk to the Hunter’s current economic trajectory. And yet Government has the levers at hand to promote smart growth, increase the supply of new dwellings and keep home ownership within reach of most families.
Exhibit A is Newcastle’s city centre, where nearly 3,000 new apartments have been constructed or approved in just three years.
Before a light rail track is laid, the economic windfall will top $2 billion. That’s how the private sector responds when Government aligns strategic direction with infrastructure provision and puts somebody in charge – as they have done with UrbanGrowth NSW and revitalisation of the city centre.
Rolling out that same model of public policy settings - backed by fully funded infrastructure projects – is how the new Hunter Growth Plan can turbo-charge housing supply on the urban fringes and in the sub-regional centres, where most of the growth will occur.
And because good governance matters, the new regional plan must have legislative teeth. Without that, regional planning will remain the “black hole” of policy when it comes to managing the Hunter’s growth and infrastructure needs.
The region simply can’t afford another ten years of committees made up of Council officers and representatives of State agencies, under-performing and lacking any delegated powers.
A Hunter Commission – modelled on the Greater Sydney Commission – with authority to lead the delivery of jobs, housing, services and infrastructure, as well as the statutory powers to remove bureaucratic hurdles, is what the Hunter needs and deserves.
Only then will the laws of arithmetic be on our side again.
Media contact: Andrew Fletcher | M 0407 410 017| E [email protected]