{"id":471557,"date":"2026-02-10T22:59:17","date_gmt":"2026-02-10T22:59:17","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/471557\/"},"modified":"2026-02-10T22:59:17","modified_gmt":"2026-02-10T22:59:17","slug":"developers-desert-plans-for-new-apartments-in-sydneys-west-due-to-construction-costs-and-interest-rates","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/471557\/","title":{"rendered":"Developers desert plans for new apartments in Sydney’s west due to construction costs and interest rates"},"content":{"rendered":"

After renting in Western Sydney for almost a decade, Dave Anderson fears his aspirations of buying a home in the region are becoming even more out of reach.<\/p>\n

“Unless I suddenly win the lottery, I’m not going to own a house in Sydney,” Mr Anderson said.<\/p>\n

While new free-standing homes are being constructed across parts of his neighbourhood, the 38-year-old public servant feels locked out of the market, due to a lack of affordable apartments.<\/p>\n

“It frustrates me that people are like, ‘Oh you can’t build an apartment tower here’ and I’m like, why not?” he said.<\/p>\n

“Western Sydney hasn’t filled up yet, there’s tonnes of space.”<\/p>\n

\"generic<\/p>\n

Mr Anderson wishes more of Western Sydney’s land would be converted into new apartments versus houses. (ABC News: Monish Nand)<\/p>\n

Despite the seemingly ample land, developers are deserting plans for new apartments in Sydney’s west.<\/p>\n

Industry peak bodies and economists blame mounting construction costs and rising interest rates for the stalling of new projects.<\/p>\n

‘Big problem’ with financing new housing<\/p>\n

Urban Taskforce Australia CEO Tom Forrest warned it was “very difficult to make the finances stack up” for developing apartments west of Parramatta.<\/p>\n

\"A<\/p>\n

Tom Forrest explains the challenges of developing apartments west of Parramatta. (ABC News: Liam Patrick)<\/p>\n

He said because of this, developers were focusing on the city’s east and north.<\/p>\n

“We’re getting 22,000 approvals in Western Sydney over the last 12 months, but only 11,000 commencements,” Mr Forrest said.<\/p>\n

Mr Forrest said this was because there were not enough purchasers willing to pay a price to cover the cost of building new apartments in the west.<\/p>\n

“That’s a real problem, and it shows a big problem with feasibility that doesn’t exist in the eastern suburbs and on the north shore,” he said.<\/p>\n

\"Generic<\/p>\n

Developers are deserting plans for new apartments in Sydney’s west. (ABC News: Keana Naughton)<\/p>\n

Interest rate rises inflaming feasibility questions<\/p>\n

Last week’s interest rate rise<\/a> \u2014 the first in two years \u2014 has only heightened concerns about the feasibility problem for apartments.<\/p>\n

KPMG urban economist Terry Rawnsley said the impact of interest rate rises was two-fold \u2014 less consumer demand for apartments due to a reduced borrowing capacity, and greater difficulty for developers in getting the finance needed for projects.<\/p>\n

“It’s probably going to be another factor that’s going to push more projects to the east away from Western Sydney,” he said.<\/p>\n

Mr Rawnsley warned of the longer-term consequences of such a trend.<\/p>\n

“If we don’t kind of see more of this affordable housing coming in Western Sydney, what we’ll start to see is more of a brain drain out of Western Sydney,” he said.<\/p>\n

“People will be even priced out of those more affordable suburbs, so you’ll have people leaving Western Sydney, maybe going to Melbourne, south-east Queensland, Wollongong, Newcastle.”<\/p>\n

\"KPMG<\/p>\n

Mr Rawnsley said the recent interest rate rise could push more projects to the east away from Western Sydney. (ABC News: Gavin Coote)<\/p>\n

Government developer shelves plans for 1,500 homes<\/p>\n

In January, government developer Landcom confirmed it had shelved plans for three housing projects in Western Sydney \u2014 that would have delivered about 1,500 new homes.<\/p>\n

It cited “increased costs, including land acquisition costs” as the reason behind the decision, and that it would direct its funds into other nearby housing projects.<\/p>\n

But Mr Forrest said Landcom’s withdrawal of those projects sent a concerning signal to the housing sector.<\/p>\n

“If Landcom can’t make a project development work, no one can,” he said.<\/p>\n

“If ever there was a signal to the government that they need to take action to reduce the cost of construction by reducing some of those fees, taxes and charges, well this is it.”<\/p>\n

\"generic<\/p>\n

Persistently high construction costs are another factor detering developers from the west. (ABC News: Monish Nand)<\/p>\n

Ray White Projects director Mark Bernberg said persistently high construction costs, along with layers of red tape, would continue to deter developers from the west.<\/p>\n

“And I know developers have got this reputation of making too much money, but it’s really not the case in Western Sydney,” he said.<\/p>\n

“A lot of these developers are either struggling, or sitting on the edge of bankruptcy.”Government spruiks developer finance support<\/p>\n

The Minns government insisted it was taking steps to spur on more housing construction \u2014 in particular its Pre-sale Finance Guarantee scheme.<\/p>\n

The scheme allows the government to act as guarantor for eligible housing projects to help developers secure finance lenders’ approval and fast-track construction.<\/p>\n

Renter priced out back in<\/a><\/p>\n

Mandatory affordable housing contribution scheme could bring relief to renters like Carrie-Ann.\u00a0<\/p>\n

NSW Planning Minister Paul Scully said the government had a “strong housing pipeline” for Western Sydney, with more than 10,000 homes declared ‘state significant’ by the Housing Delivery Authority.<\/p>\n

“The Minns Labor Government is rebalancing housing, driving infill development close to transport, jobs and services so that housing growth is more fairly distributed across Sydney,” the statement said.<\/p>\n

“By leading initiatives and reforms which cut red tape, we have helped save not only time but money by slashing lengthy planning delays.”<\/p>\n","protected":false},"excerpt":{"rendered":"After renting in Western Sydney for almost a decade, Dave Anderson fears his aspirations of buying a home…\n","protected":false},"author":2,"featured_media":471558,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[240628,64,63,99,22947,240626,240630,39045,100556,240629,234850,240631,97189,240633,240632,11135,240627,16391,240625,240623,240624,240622],"class_list":["post-471557","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-apartment-affordability","tag-au","tag-australia","tag-business","tag-buyers","tag-free-standing-homes-western-sydney","tag-government-developer-landcom","tag-housing-affordability","tag-housing-delivery-authority","tag-housing-market-sydney","tag-interest-rate-rise","tag-kpmg-urban-economist-terry-rawnsley","tag-nsw-planning-minister-paul-scully","tag-pre-sale-finance-guarantee-scheme","tag-ray-white-projects-director-mark-bernberg","tag-renting","tag-urban-taskforce-australia-ceo-tom-forrest","tag-western-sydney","tag-western-sydney-apartments","tag-western-sydney-homes","tag-western-sydney-houses","tag-western-sydney-renting"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/471557","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=471557"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/471557\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/471558"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=471557"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=471557"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=471557"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}