In an effort to tackle the ongoing affordable housing crisis, the NSW Government has made a number of moves to fast-track the construction of new homes. These initiatives, introduced since June 2025, also sit alongside further deferrals of compliance obligations for developers and building practitioners.

State significant developments

Since February 2025, the NSW Government has declared 215 new housing projects to be State Significant Developments (SSDs), providing an alternative approval pathway that bypasses council Development Control Plans and allows projects to proceed with higher yields than would ordinarily be permitted.

The new SSDs follow recommendations from the Housing Delivery Authority (HDA) and are designed to accelerate housing supply, ease compliance pressures and cut costs for developers.

The NSW Government has been issuing new declarations regularly since the HDA’s establishment, with the latest (made on 22 August 2025) being the twelfth declaration to date.

The declarations encompass both regional and metropolitan NSW projects. For example, the ninth set of declarations, made on 12 June 2025, targeted key growth areas of western Sydney, including Rouse Hill, Lidcombe, Merrylands, Parramatta and Edmonson Park.

The most recent set of declarations made on 22 August had a broader geographical scope, with projects scattered across metropolitan Sydney, in suburbs such as Harris Park, Casula, Bondi Junction and Burwood, among others and three declarations were made for projects in regional NSW.

While SSD status does not guarantee faster delivery, it does impose strict milestones, including a requirement that construction begin within 12 months of approval. The recent declaration signals a strategic use of state powers to push forward large-scale housing projects that may otherwise stall at the council level.

The combined SSDs declared in 2025 are currently expected to deliver almost 80,000 new homes to NSW, with more SSDs expected.

Groundwater licence exemptions cut early-stage delays

On 13 June 2025, the Government introduced temporary groundwater licence exemptions to reduce red tape during excavation and early construction. Developers are now permitted to remove groundwater without a licence if the projects fall into certain prescribed categories. These include coastal construction projects until June 2029, essential infrastructure projects such as road, rail and utilities delivered by public authorities, and water infrastructure projects delivered by private bodies with approved schemes under the Water Industry Competition Act 2006.

Previously, a licence was required if more than three megalitres of water were to be extracted. All other water management rules remain in force. The Government has estimated that this change will support the delivery of 377,000 additional homes by 2029.

The impact of this reform will be most strongly felt in coastal and large-scale infrastructure projects, with limited benefit for smaller residential developments.

Compliance deadlines deferred to ease cost pressures

The NSW Government has also extended several key compliance deadlines through the Building, Design and Strata Legislation Amendment Regulation 2025. The Regulation amends obligations under the Building and Development Certifiers Act 2018, the Design and Building Practitioners Act 2020 (DBPA) and the Strata Schemes Management Act 2015, providing temporary relief for developers and building practitioners.

Work involving alterations, additions, repairs, renovations or protective treatment to class 3 or 9c buildings will remain excluded from DBPA compliance requirements until 1 July 2026. Registered building practitioners will also continue to be exempt from DBPA insurance requirements until 30 June 2026. Finally, the proposed increase in the building bond from 2 to 3 per cent of contract value has been postponed until 1 July 2026.

These measures defer significant financial and administrative burdens, offering developers and practitioners welcome breathing space during a period of heightened construction costs.

Outlook for the industry

The June 2025 announcements offer short-term relief and long-term potential. Developers will benefit from accelerated approvals and deferred costs and alternative pathways aimed at delivering much-needed housing supply.

Still looming is the commencement (insofar as they survived consultation and a lengthy post consultation period) of a suite of reforming legislation (generally known as the Building Bills), which will bring a new and unfamiliar regulatory landscape for the industry. As caution attends uncertainty, this may dampen enthusiasm in the housing pipeline.

Main image: Envato

Written by Holding Redlich Partner Christine Jones & Associate Brandon Thai

Architecture & Design Team

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