Housing industry insiders say they are not surprised by the NSW premier’s admission that the state will not meet its housing targets agreed to just last year.

The target, which was set out by the federal government in August, would see an average of 75,000 new dwellings a year over the next five years.

It is part of a broader plan to build 1.2 million homes across Australia during that period.

Premier Chris Minns said the government would fall short of the goal but was working on building as many houses and units as possible to alleviate housing shortages and skyrocketing costs.

Planning Minister Paul Scully said the premier was “being up-front with people”, before blaming the former Coalition government over the “crisis”.

“We’re working off a big backlog that we inherited from the previous government but we’re determined to make sure we get there in the future,” he said.

“I think a fair-minded person looking at the current climate would understand that we’re working off less than a standing start to try and make up for the housing crisis we inherited from the previous government.”

Mr Scully said the government was currently “working through a series of reforms” to boost supply.

“We’ve already introduced, and we’re introducing and implementing this year, a series of the biggest planning reforms in a generation, which will deliver thousands of homes over the coming years,” he said.

When asked on how many homes the government was planning on delivering, Mr Scully said he was not “putting a number” on it.

Crisis will take ‘years to fix’

But housing and construction industry leaders say there is only so much the government can do. 

Property Council of NSW executive director Katie Stevenson said short-term problems in the housing sector should not be allowed to sabotage long-term goals to build more affordable homes.

Ms Stevenson said the state still had a commitment to build almost 380,000 homes over the next five years, and she said that must remain the goal, despite significant challenges the state will face.

Among those challenges are “exceptionally high” building costs.

Master Builders Association executive director Brian Seidler agreed finding tradespeople would be difficult but also said many prospective home owners are holding off committing to new projects because of high interest rates and the rising costs.

“In the commercial sector, particularly when we’re building apartments buildings, the developer … that is the people who are putting up the money, are going to need the planets to align so that the outcome for them is worth going into the project and if it isn’t, those sorts of projects get put on hold,” he said.

Urban Taskforce CEO Tom Forrest said the current housing crisis had been developing for many years and “years” would be required to remedy it.

“It takes years to create the sort of crisis that we find ourselves in terms of the speed of the planning system and the number of building approvals,” he said.

“And it takes, frankly, years to fix it.

“The government was never committed to 75,000 in year one.”

Mr Forrest said the former government had “left a complete disaster” for the current government to fix by not delivering enough homes.

“[The former government] slammed the brakes on before the 2019 election and we’re suffering now the results of that,” he said.

He said he “hoped” that planning approvals would “increase steadily” and possibly go above the target “towards the latter part of the five-year period”.

Fresh plans for higher density housing

The NSW government already announced plans last month to build more than 200,000 homes and focus on higher density living by building up, not out.

The plan includes 138,000 new homes at rezoned sites in 31 suburbs, and 47,800 homes near eight major transport hubs, with the latter to be completed over the next 15 years.

Those suburbs include Bankstown, Bays West, Bella Vista, Crows Nest, Homebush, Hornsby, Kellyville and Macquarie Park.

The government will offer developers in those zones a fast-tracked approvals process, called a state significant development, to ensure apartments are built quickly.

It will be offered to developments over $60 million, and construction must start within two years of approval.

The government also intends to relocate Rosehill Racecourse and replace it with 25,000 homes as part of the plan.

Opposition Leader Mark Speakman said Mr Minns had “failed his biggest test” and can’t “be trusted” because he could not meet the target.

“This embarrassing acknowledgement that NSW won’t reach his targets, agreed to only last August, is a result of Chris Minns’ back-of-envelope approach to addressing the ongoing rental and housing affordability crisis that is affecting people right across NSW,” he said. 

Mr Speakman said it was now “time” for the premier to accept the opposition’s “offer” of discussing their proposal for housing with the federal government.