New developments under threat
Investors may be passed on costs from developers if the NSW Government doesn’t step up to the plate, according to Laing+Simmons general manager Leanne Pilkington.
Developers looking at greenfield areas are currently deterred by levies that the government requires developers to pay for infrastructure services.
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The Special Infrastructure Contribution scheme, currently under review, and Section 94 require developers to pay levies to fund infrastructure that will complement their greenfield developments.
These levies may be passed on in the price of the dwellings for investors and buyers.
“The property industry has long called for the removal of developer contributions as developers necessarily have to recover these upfront costs, the end cost naturally falling to the purchaser,” Ms Pilkington said.
Without government investment in infrastructure and assistance with opening up land for development, significant growth and urban sprawl problems could occur as developers are deterred.
The risk is particularly great for developments on the outskirts of the city, where they are generally underserviced by transport links and other social infrastructure and levies are more likely.
“A strategy focused on the long term strength of the employment market, provision of adequate housing supply to support population growth and the implementation of effectively planned infrastructure is necessary if Sydney is to counter worsening urban sprawl over the long term,” she said.
"Infrastructure has traditionally been a Government responsibility and it should continue to be so. If the burden of financing the necessary infrastructure to support new development is not the sole responsibility of Government, then what exactly do our taxes pay for?"
