News & Media

December 2016 Newsletter

A TALE OF THREE CITIES

The Greater Sydney Commission’s recently released plan to create a metropolis of three cities may sound like the title of an undiscovered book by a certain famous author, but the result will be far from Dickensian.

The Commission, headed by former Sydney Lord Mayor Lucy Turnbull, was established last year to determine the shape of the city’s urban development. It released its Draft District Plans, part of a 40-year vision called Towards our Greater Sydney 2056 on November 20. The document is a draft amendment to the Greater Sydney Region Plan.

A massive boost to housing and employment targets to be implemented across the Sydney region in the next two decades is the centrepiece of the proposal. Those jobs and dwellings will be needed to provide for the additional 2.1 million residents predicted to join the city’s population by 2036.

The District Plans are organised around the theme of a metropolis of three cities: Eastern Harbour City, Central Parramatta River City and Western City. Each city will have a unique identity, and is planned in order to maximise liveability, productivity and sustainability. Interestingly, Parramatta, not the CBD, will become the central city.

“A metropolis of three great cities gives a clear picture of how we can realistically achieve the goal of people living within 30 minutes of where they work, study and play,” Mrs Turnbull says. “With our starting point at 2016, we are planning Greater Sydney to 2036 and have a strategic vision to 2056.

Over this time, at current trends, Greater Sydney will grow from 4.6 million people now, to 6 million in 2036 and 8 million in 2056, with most of the growth taking place west of Parramatta.”

Housing is set to receive a major boost, with a target for 189,100 new properties to be built across the three districts. This would include up to 10 per cent affordable housing that would be rented at below market rates to households with an annual income of less than $67,600.

The draft plans also include ambitious targets for jobs growth across the city. It’s estimated the city will require about 817,000 new jobs by 2036, up from a previous projection of 689,000. The plans target the area around the Badgerys Creek airport for about 32,000 new jobs in the next 20 years, and also aim to continue to concentrate jobs in the CBD and Parramatta.

“Our ambition is for greater Sydney to be the kind of global city that is home to a mix and variety of places we want to live, work, study, play and visit – places that are close to those essentials like housing choices, smart jobs, great schools, healthcare, open spaces and facilities,” Mrs Turnbull said.

The draft district plans will be open for consultation until March, and finalised by the end of next year. Visit http://www.greatersydneycommission.nsw.gov.au/ to view the plans or make a submission.

WHAT LIES AHEAD OF APARTMENTS?

Will there be or won’t there be. A glut in apartments, that is.

It’s the question that’s been on the lips of many in the industry and it’s certainly created plenty of debate about whether or not there’s set to be an apartment glut in Sydney and, particularly, Melbourne. At Charles+Stuart we’ve certainly dismissed claims of a looming glut in central parts of Sydney – and it was a view echoed recently by a leading figure at Westpac hosed down the claims.

George Frazis, the head of Westpac’s consumer bank, recently predicted that Sydney will continue to have a shortage of homes over the next two years. Over the next two years, around 10,000 apartments are expected to be completed in Sydney, while in Melbourne that figure is 16,000.

In an interview with The Sydney Morning Herald, Mr Frazis said Westpac had “absolutely no concerns” about its exposure to inner-city units, thus playing down the impact of the apartment building boom on prices.

“If you look at NSW and Sydney, we still have a structural shortage of housing in Sydney because of the population growth and the pent-up demand,” Mr Frazis said. “Even if we look at what’s coming online over the next year or two, we’ll still have structural under supply.”

Mr Frazis’s viewpoint is somewhat in contrast to the Reserve Bank of Australia’s assessment in October about risks in the apartment market “coming to the fore.” And the Australian Prudential Regulation Authority’s chair Wayne Byres was quoted as saying there could be “difficulties” in the market’s ability to absorb the large increase in new apartments.

Apartment values during the past 12 months have increased by about 4 per cent in Sydney and fallen by about 6 per cent in Perth. Melbourne apartments are up by more than 5 per cent and Brisbane's down by about 1 per cent over the same period.

STRATA LAWS MOVE INTO THE 21ST CENTURY

Modern technology and changes to voting requirements are set to revolutionise apartment ownership and management, thanks to a recent overhaul of NSW strata laws. The legislation, which changed as part of a mandatory 10-year re-evaluation, was modernised to fit the reality of living in a strata townhouse or apartment in an age when more than a quarter of the state's population lives in, owns or manages strata.

The new laws are designed to not only make it easier to update ageing buildings, but increase density as part of the Government’s Urban Renewal Strategy.

The state’s new Strata Schemes Management Act, which came into effect on November 30, includes relaxed requirements for attending general and committee meetings as well as voting. Owners can also now use conference calls and video conferencing to participate in meetings, which removes the need for proxies.

A significant, and potentially controversial change, is the “strata renewal” clause which allows 75 per cent of owners to support developmental changes instead of the previous 100 per cent.

Critics of the laws say they could place unfair pressure on financially vulnerable residents who may be forced into changes

they do not support. However, supporters say it enables investors in older blocks to sell to developers or renovate to increase capital growth without unanimous backing by other owners.

Some key changes to the Act include:

  • Strengthening the accountability of strata managers
  • Allowing owners to adopt modern technology to conduct meetings, vote, communicate and administer their scheme
  • The need for owners to review by-laws within 12 months, which can be customised to suit their lifestyle - such as whether to allow owners to keep a pet by giving notice to the owners’ corporation
  • A process for the collective sale and renewal of a strata scheme
  • A simpler, clearer process for dealing with disputes
  • Broadening tenant participation in meetings
  • A new option to manage unauthorised parking through a commercial arrangement between a local council and a strata scheme
  • A clearer and simpler renovations process, which waives approval for cosmetic renovations within the strata lot (for example, installing handrails for safety).

SEASON'S GREETINGS

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