The scale of the task facing NSW to reach its housing targets was laid bare on Wednesday when new data showed building completions are at a 12-year low.
The NSW government has launched a series of measures across Sydney, Newcastle and Wollongong as it chases an ambitious five-year target of 377,000 new homes.
New Australian Bureau of Statistics figures show dwelling completions fell from 11,525 to 10,776 in NSW over the March quarter while commencements fell from 11,361 to 8961, the worst result since June 2012.
Property Council of Australia NSW executive director Katie Stevenson said the low completion numbers were 10,000 below the quarterly average of 18,850 required to hit the target by 2029.
"The data reflect the cold economic headwinds blowing through the construction sector, with skill shortages, materials costs, access to capital and interest rates all impacting project feasibility," she said.
The government has announced the Transport Oriented Development Program, apartment pattern book, low- and mid-rise planning reforms, housing targets and a league table of councils' assessment performance.
"But to get more housing delivered more quickly, the industry needs feasible projects," Ms Stevenson said.
"Currently, project risks are too high, and the sector's ability to secure finance is proving difficult."
Several high-profile Newcastle apartment projects have stalled in recent years since interest rates and construction costs started to climb.
An analysis of building approvals shows 2023-24 has been relatively buoyant in the Lower Hunter.
ABS data for the financial year to May 2024 show Lower Hunter dwelling approvals are up from 3799 in the corresponding period last year to 4890.
The rise was due to a sharp jump in Newcastle local government area from 553 to 1503 approvals.
Property Council NSW deputy executive director Anita Hugo said it was "fantastic" to see some councils improving assessment speeds, but others were underperforming.
She said the loss of the Newcastle Mines Grouting Fund, access to finance and a lack of infrastructure investment were barriers to housing development in the Hunter.
The government has announced relaxed planning rules around nine Hunter train stations and is moving to rezone public land at Broadmeadow for high-rise developments.
The Property Council says the latest state figures support its campaign to suspend residential development taxes and charges and speed up planning decisions.
"These new ABS numbers cast a long shadow on the potential for industry to deliver on a once-in-a-generation ask for more homes than ever before under the National Housing Accord," Ms Stevenson said.
A recent report by the Everybody's Home campaign showed a typical Newcastle household was paying an extra $9500 a year in rent compared with four years ago.
The Urban Development Institute of Australia published research in June which estimated a typical new two-bedroom flat in the nine Newcastle suburbs covered by the government's Transport Oriented Development (TOD) Program would need to fetch more than $1.15 million to be viable, 53 per cent higher than the average market price.
