7 August 2026

In this Edition...

1. Now is not the time to tinker with LMR reforms 

2. Minns Government passes Building Bill: Ambulance-chasing lawyers put on notice

3. Urban Taskforce thanks Simon Draper and welcomes Michael Coutts-Trotter

... and much, much more.

4. DLI - "relevant defect" definition passes the NSW Parliament
5. State Government rezonings to open up significant new housing opportunities
6. New Illawarra-Shoalhaven Plan aims for 100,000+ new homes
7. The property market correction appears to be accelerating
8. Are we heading for more interest rate pain?
9. Data reveals scale of SMSF residential lending ban far exceeds Government estimates
10. July HDA meeting puts nearly 4,000 extra homes in the pipeline
11. DEA: Newmarket Randwick Stage 2 takes out top gong for Master Planned Development while The Lands wins Adaptive Reuse Development.
12. Council Watch
13. Members in the news

1. Now is not the time to tinker with LMR reforms 

The middle of a housing supply crisis is not the time to be changing reforms designed to address it. 

The NSW Opposition’s misguided policy, announced today by Leader Kellie Sloane, to allow councils to propose alternatives to LMR zoning may be well meaning, but it opens the door for anti-development councils to resist and obstruct new housing even more vehemently than they currently do. 

The Low- and Mid-Rise Housing reforms (LMR) were designed to open up housing opportunities by allowing more diverse residential development close to town centres and transport hubs. 

Some councils have embraced it and sought to increase housing availability and affordability within their own precincts.  Others have openly and vocally opposed it. 

It is not the former who will be taking advantage of the Opposition’s policy – it will be Nimby councils cynically using this pathway to continue to delay, obstruct, and subvert housing development within their LGAs. 

We have already seen councils seek to submit “alternative” plans, which will not deliver the housing needed, or introduce development control plans (DCP) that – in their own words – seek “to minimise the impact of the recently introduced low and mid-rise housing reforms”, giving applicants “limited incentive for redevelopment”, and thus rendering housing supply policies unworkable

In other words, deliberately seeking to obstruct the rollout of LMR. 

This policy risks emboldening such oppositional behaviour. 

So, for every Bondi Junction Vision or Burwood Rezoning that increases housing supply and connectivity, we’re likely to see three times as many Mosman Masterplans and Woollahra DCPs that seek to undermine new housing development altogether. 

While the Opposition’s policy argues that plans must propose the same number of, or more, new houses as the current LMR zoning, it is very easy for councils to rezone properties that they know will be too impractical, too expensive, or even impossible to redevelop. 

Councils have always had the power to rezone for more housing.  Most of them chose not to use it, preferring instead to limit growth and to prevent new housing opportunities. 

Development controls such as heritage restrictions, setback controls, and view protection have frequently been used by councils to block or deter applications, while claiming that they are “balanc[ing] housing delivery with landscape, amenity, and urban design objectives.” 

At the same time, a variety of taxes, fees, and charges to pay for local infrastructure, “affordable” housing, or public art is driving feasibility into the ground and making many projects unviable. 

It is a double-whammy – restrict what can be done and then pump up the council levies, so that building anything ceases to be practical or feasible. 

The LMR is supposed to increase housing supply and diversity, to improve affordability and support opportunities to deliver new dwellings in areas that can support them.  If the Opposition thinks the current policy is underperforming, it won’t be improved by allowing councils to subvert it further. 

Councils that have expressed opposition to LMR to date have not done so because they believe that a “locally-tailored” plan will deliver more housing.  They oppose it because a small, but vocal, cohort of their ratepayers don’t want development – claiming to be happy for new housing, just not near them. 

Indeed, some of the councils with the lowest targets under the National Housing Accord are amongst the most vocal against the LMR policy. 

Further, the councils that consistently deliver the worst results against these Accord targets on an approvals basis are the same ones that will take the opportunity to challenge LMR and propose an alternative plan. 

It’s the planning version of allowing a child who doesn’t want their brussels sprouts to argue why cake is a better option. 

The Opposition policy risks exacerbating conflict between councils and the Department, by making the latter responsible for enforcement.  This sets departmental staff and council employees on a possible collision course or alternatively opens up the risk that plans could be waived through to avoid political blowback. 

LMR development projects have actively contributed new market and affordable housing to local communities, particularly through the Infill Affordable Housing Bonus Scheme, which has delivered thousands of new and potential affordable rental properties to the market. 

This is significantly more than has been achieved by any council, but it will be lost if councils can just put forward their own plans, given their antipathy towards infill affordable housing. 

Could the LMR policy deliver faster?  Sure.  But that won’t be achieved by letting councils rewrite the rules. 

Over recent years, the Opposition has committed to a number of reforms that have, and will, helped address the housing supply crisis, and is to be commended for its bipartisan approach. 

This is welcomed, and Urban Taskforce supports any efforts that will improve the delivery of housing supply. 

This policy does not hit the mark. 

New South Wales needs more housing where people want to live, not less.  We are already significantly behind our National Housing Accord target and are falling further and further away from it, as the housing supply crisis grows ever larger. 

Now is not the time to be tinkering with LMR. 

2. Minns Government passes Building Bill: Ambulance-chasing lawyers put on notice

Mandatory mediation over building defects is another step closer, with the passing of the long-awaited Building (Approvals and Practitioners) Bill 2026 this week in the NSW Parliament. 

Despite concerns that the legislation might be delayed, following amendments by Mark Latham in the Legislative Council, the Minister for Building, Anoulack Chanthivong , accepted the changes and moved for the Bill to proceed. 

This is a very positive result for the development sector.  

The requirement in the Bill that a dispute resolution process be set up, managed by the NSW Building Commissioner, is an important change.  It will take some of the legal sting out of dealing with defects and will make it easier to resolve concerns.   

If people have to resort to lawyers, costs will automatically go up. 

But if they have to negotiate over rectification, those additional legal fees may be avoidable. 

Speaking to 2SM, Acting CEO Paul Waterhouse said that the reforms were welcome: 

Urban Taskforce Australia been at the forefront of calls for the NSW Government to adopt this proven model based on Queensland’s building defect dispute mediation model. 

Now that the legislation has passed, the Minister and the Building Commissioner will need to turn to the development of the scheme, and the regulations required to support it. 

The results of this work will be to create a system that sidelines the lawyers and gets parties to discuss the most appropriate way to ensure the rectification of building defects. 

At the moment, when a defect occurs, bodies corporate will more often than not turn to legal representatives.  Their usual advice?  Head to court.  This entrenches positions and exacerbates problems that might otherwise be easily resolved. 

The new legislation will deliver mandatory mediation that compels parties to negotiate a reasonable outcome.  It will reduce costs for all concerned and deliver more reliable consumer protection in the building sector. 

Dispute resolution was not the only reform delivered through the Building (Approvals and Practitioners) Bill 2026.  The suite of reforms – designed to support the NSW Government’s goal to speed up housing delivery – also provides for: 

• streamlining the building approval process by integrating design and building declarations into the building approval process, reducing red tape and administrative burden, and creating a new building approvals framework that provides clearer obligations for the building industry and approval authorities;
• providing clear and simple processes for approval and completion of building work and permitting staged approvals to enable faster commencement of building work and variations approved by approval authorities significantly reducing downtime during construction;
• modernising and removing significant administrative burden for approvals by leveraging digital systems and replacing outdated paper-based processes; and
• supporting uptake of modern and more efficient methods of construction, aiming at speeding up approvals and engendering greater confidence in the community about the opportunities unleashed by technology.

The Bill is a welcome contribution to ongoing planning and building reforms in New South Wales, and we expect that it will have a very positive effect on addressing the ongoing housing supply crisis. 

3. Urban Taskforce thanks Simon Draper and welcomes Michael Coutts-Trotter 

His experience both in government and in the private sector gave him an understanding of the challenges facing the development sector and the delivery of housing, enabling changes that have made a real difference. 

He was brought on to increase housing supply and affordability and, in his time as Secretary of the Department, he has led some of the NSW Government’s key reform initiatives.  As the Chair of the Housing Delivery Authority in particular, Mr Draper has overseen the transformation of development approval, recognising that feasibility and higher density are needed if more housing is to be delivered. 

We congratulate Mr Draper on his appointment as Secretary of the Federal Department of Industry, Science, and Resources and wish him well in the new role. 

As a former head of the Premier’s Department, Mr Coutts-Trotter comes back to the role with a good understanding both of the housing supply crisis and of the workings of the NSW Government. 

Urban Taskforce thanks Mr Draper for his valuable contribution and welcomes Mr Coutts-Trotter to his new role. 

4. DLI - "relevant defect" definition passes the NSW Parliament 

A solution to the decennial insurance quagmire is in the offing, with the passing this week of the Fair Trading and Building Legislation Amendment Bill 2026. 

The Bill, approved by the NSW Parliament, amends the Strata Schemes Management Act 2015 to change the definition of “decennial insurance” (otherwise known as decennial liability insurance, or DLI). 

While the existing Act insures against “serious defects” in building elements, the Amendment Bill changes this to “relevant defects”. 

A “relevant defect” is defined as: 

As Tom Kearney from the Building Commission told Urban Taskforce some weeks back, these changes have been made to remove the current barriers preventing companies from entering the DLI market. 

DLI is an insurance product that provides owners corporations with coverage for serious defects in common areas for up to 10 years after an apartment building (Class 2) is first occupied. 

It is an alternative to the Strata Building Bond for certain class 2 buildings, covering some critical building elements (fire safety systems, waterproofing, structural/load-bearing components, essential mechanical, plumbing and electrical services) and indemnifying the insured (building owners) from liability for loss or damage arising from defects to common property. 

The change from “serious” to “relevant” will resolve some of the concerns of insurers, who were reluctant to offer DLI.  It is hoped that this will lead to new players in the market and the subsequent commencement of this form of insurance. 

Until then, developers will still be able to gain Strata Building Bond coverage, which is locked in at 2% until 1 July, 2028. 

The amendment this week may appear to be small, but it is certainly relevant.  And it may yet lead to a future thriving defect insurance market. 

5. State Government rezonings to open up significant new housing opportunities

Two announcements today by the NSW Government foreshadow up to 12,000 new homes in the Parramatta North and Cherrybrook precincts. 

The State-led rezonings aim to deliver a large number of homes, community facilities, and jobs, with significant open space and transport connectivity. 

The plans will transform these two areas. 

It will create up to 12,000 potential new jobs across health services, research, education and supporting industries and provide for a new university campus to support the Westmead Health and Innovation District. 

The precinct will have multipurpose community facilities and up to 10 hectares of public open space, including sports fields, extended riverside pathways, parks and gardens, plazas and play spaces, recognising and adapting to existing heritage and aboriginal cultural concerns. 

Plans are on track for a public primary school post 2041 and for cycling and walking paths. 

Both precincts are connected to transport. 

6. New Illawarra-Shoalhaven Plan aims for 100,000+ new homes

• increase the supply of more affordable, well located, and diverse housing in Wollongong and other centres
• maximise the unique economic opportunities offered by advanced manufacturing, defence, and renewable energy, leveraging industrial lands such as those in Port Kembla
• strengthen the strategic relationship between the region and south west Sydney
• grow the number of service jobs across health, knowledge-intensive industries, and the arts and cultural sectors
• celebrate the region’s environmental identity and connections to the coast, escarpment, and highlands

The Illawarra-Shoalhaven Plan aims to deliver 117,000 more homes, more than 101,000 new jobs, delivering critical infrastructure such as transport, roads, schools, and health services to support a growing and changing population, which is projected to increase by161,000 people between 2026 and 2046.

It establishes an urban growth area (UGA), with approximately 80 per cent of housing growth focused around key urban centres like Wollongong, Shellharbour, Bowral, Kiama, and Nowra, improving access to jobs, transport, schools, and services.  

Around 38,000 new homes will be built in West Dapto and greenfield areas around Nowra-Bomaderry over the next 20 years.

 Infill development will be concentrated in the Wollongong, Shellharbour and Nowra city centres with state led rezonings now creating additional capacity for housing (such as the North Wollongong TOD).

Across these locations some areas are proposed to evolve from low density into mid-rise housing, and a number of planned precincts are slated to go through large scale urban renewal. This includes the East Lake Illawarra Corridor, connecting Wollongong, Warrawong, Warilla and Shellharbour City Centre.

The UGA will be supported by a regional prioritisation framework, providing increased certainty for infrastructure providers about when and where enabling infrastructure is required to support planned urban growth. This will prioritise and sequence feasible locations based on infrastructure capacity, funding, and delivery timing to ensure orderly, efficient, and serviced growth.  

7. The property market correction appears to be accelerating

Many so-called experts are currently reviewing their outlook for property prices for the second half of the year, as the uncertainty created by the Federal Government’s tax policy changes and the war in the Middle East, along with the three interest rates rises, bites into the property market.

According to data from Cotality, property prices across almost every capital city are in decline, led by a 1.4 per cent slump in Sydney during July alone and 4.0 per cent over the quarter.

National dwelling values dropped 0.7 per cent last month, the steepest single month fall since December 2022.

The softer result reflects affordability pressures, reduced borrowing capacity, elevated mortgage costs and weak consumer confidence.

Of note, the house price slump has been more pronounced at the premium end of the housing market rather than in the market that the Federal Government was hoping to help, first home buyers.

While a slump in property prices would support the RBA easing interest rates, this is countered by surging home building and service costs which are pushing inflation above the band in which the RBA would like to see it (see article 8).  

8. Are we heading for more interest rate pain? 

The ABS released its monthly Consumer Price Index (CPI) data last week which showed headline inflation slowing to 3.8 per cent in the 12 months to June, 2026, compared to 4.0 per cent in the 12 months to May, 2026. Meanwhile, the trimmed mean measure, or underlying rate, which strips out volatile items such as petrol, held steady at 3.6 per cent. 

While on the surface this result is better than the markets expected, inflation remains outside the RBA’s target band of 2-3 per cent. 

Housing costs remain a key driver of inflation in the economy. Annual inflation for new dwellings reached its highest level in almost three years, at 5.8 per cent, driven by builders passing on higher material and labour costs. 

So, what does this mean for interest rates over the second half of the year?  The RBA has clearly got its hands full. 

On the one hand uncertainty around global and domestic factors could weigh against a rise.  According to Domain, Sydney house prices fell 3.3 per cent in the June quarter, the largest quarterly decline at the start of a downturn in more than 30 years of data.  

However, on the other hand cost pressures remain elevated in the economy, the labour market has seemingly remained resilient and the energy crisis appears is far from resolved.  

The RBA Governor, Michele Bullock, in a speech on 28 July to the Anika Foundation, made it clear that the fight against inflation was far from over.

‘Inflation has since increased and is now above target. Indeed, it was rising and above target even before the recent oil price rises. This means that we haven’t yet achieved our objective of returning inflation sustainably to target’.  

Against a backdrop of ongoing capacity pressures, the Board remains focused on preventing elevated cost pressures from entrenching inflation. This does mean that some further easing in the growth of demand is likely to be required if we’re to bring inflation back down sustainably to target. A key question in the period ahead is whether the tightening in monetary policy earlier in the year is sufficient to achieve this’

So, while on balance it is possible the RBA will hold interest rates steady in August, and many economic commentators believe that will be the case, the picture for the remainder of the year is less clear especially with the Governor making it clear that the Board’s objective is to return inflation sustainably to target.  

9. Data reveals scale of SMSF residential lending ban far exceeds Government estimates

In the last edition of ULN (24 July, 2026) we reported on the Federal Government’s recent decision to axe limited recourse borrowing arrangements (LRBAs) for residential properties within self-managed super funds (SMSFs). 

Last week, the Australian Finance Industry Association (AFIA) released new data that shows over 16,000 new residential SMSF loans were written in 2025-26, with total security of $10.3 billion.  As AFIA members do not represent the full market, the true figure is likely higher. 

This is approximately four to five times the Australian Tax Office’s (ATO's) average yearly estimate of 4,000 new LRBAs. Given that the Treasury in giving advice to Government relied on ATO data, that suggests the scale of this market, and the impact of the ban, may not have been fully understood when the amendment was passed.  

At the time of announcing the ban on LRBAs, the Federal Government referred to the “small” impact this would have on the residential housing market, citing Treasury modelling (which was based on information from the ATO). 

However, this decision could in fact reduce the number of homes being built per year by anywhere from 4,000 to 40,000 homes. All of this at a time when we have a housing supply and affordability crisis.  

AFIA member data also shows that residential SMSF lending is written at an average loan to value ratio (LVR) of approximately 67 per cent, significantly below the 70 to 80 per cent LVR typical of mainstream residential investment lending.  

At that rate, with substantial member equity contributions and a heavily supervised regulatory structure, the systemic risk rationale cited in support of the ban does not stack up against the evidence. 

10. July HDA meeting puts nearly 4,000 extra homes in the pipeline

The Housing Delivery Authority met on 23 July, considering 51 EOI applications and recommending to the Minister for Planning and Public Spaces that:

•       17 EOI applications be declared SSD; and

•       34 applications not proceed.

11. DEA: Newmarket Randwick Stage 2 takes out top gong for Master Planned Development while The Lands wins Adaptive Reuse Development. 

Three of the dwellings have been delivered to Randwick City Council for affordable housing.

The Masterplan delivers lasting community benefit by strengthening neighbourhood connection, improving public access and fostering social inclusion.

In the Adaptive Reuse Development, Land Group and Built have taken out the prize for The Lands by Capella.

The development involved overcoming extensive design and construction hurdles in the face of heritage protection requirements, and the clocktower underwent significant restoration, including seismic upgrades, and the replacement of clock faces, dials, and mechanisms.

Throughout the redevelopment process the project team engaged closely with the New South Wales Government, the City of Sydney, heritage authorities, and first nations advisors.

The project demonstrates significant innovation in design, engineering and heritage restoration, achieving a balance between preserving delicate historical elements and integrating modern features.  It successfully merges historic urban design with modern functionality, addressing site constraints while delivering vibrant, liveable spaces.

Our thanks to our sponsors

12. Council Watch

Opposition to DCP fails to move Mosman Council

Mosman Council is sticking to its guns. 

Despite a majority of submissions in the recent public exhibition raising objections about their draft anti-LMR DCP, Council staff appear to have put their thumbs on the scale to give extra weight to those who agreed with them. 

It’s the planning proposal equivalent of sticking one’s fingers in one’s ears and yelling “LA!  LA!  LA!” 

So, despite 10 submissions opposing the changes – including Urban Taskforce’s extensive analysis and the Department of Planning itself – the Council has taken the “computer says ‘no’” approach and pushed ahead with what it was planning to do anyway. 

(We seem to recall the Productivity Commissioner suggesting that councils should default to “yes”, but Mosman might not have got the memo). 

This outcome was presaged by the Department of Planning, Housing, and Infrastructure, which cautioned: 

“I would like to remind Council that section 3.46 of the Environmental Planning and Assessment Act 1979 allows the Minister for Planning to direct a council to make, amend, or revoke a development control plan in the time and manner specified in the direction.” 

Not a salvo, but definitely a shot across the bow. 

In response, Council acceded to “several minor amendments” (well, at least five...) but maintained throughout that its DCP controls were “consistent with State legislation and aim to balance housing delivery with landscape, amenity, and urban design outcomes”. 

On the issue of feasibility Council acknowledged that certain controls may affect feasibility, but … it doesn't really care. 

On setbacks, streetscape character, and building form, Council claimed to be protecting “the varying character of Mosman’s streetscapes” with controls that “will encourage good development outcomes”…

On views and through-site pedestrian links, Council wants the extra amenity, even (or especially) if that restricts what can be done on site... 

On public domain costs, Council considers such works to be “necessary to support development uplift to improve the quality, functionality, and appearance of the public domain”.  In other words, if it costs more, so be it… 

There are many such examples. 

The attitude seems to be – if you want to develop, it’ll cost you. 

Mosman’s DCP is yet another example of Nimby councils seeking to subvert the LMR reforms with restrictive and reductive controls designed to deter and/or stop any form of residential development. 

This is exactly what Urban Taskforce has warned the NSW Opposition about (see article 1).  

It’s got to stop, before the whole LMR policy is effectively gutted. 

The Minister needs to act or the Nimbys will win. 

13. Members in the news

*Please note these articles may be paywall protected

“Deicorp Opens Kings Bay Village Sales Suite Following 600 Registrations of Interest…Set across a 31,300 square metre site within the Kings Bay Precinct, Kings Bay Village is one of the largest mixed-use urban renewal developments ever proposed for Sydney's Inner West.” read more…

The development in Five Dock goes to the market this weekend, delivering a total of 1,185 apartments, 200 affordable homes for key workers, and retail and commercial spaces.

Mirage News, 7 August, 2026
 

“Developer Coronation Property, which has joined the initiative, has already delivered more than 1,500 nights of accommodation alongside Habitat for Humanity and the Aboriginal Women and Children's Crisis Service.”  read more… 

The "meanwhile use" initiative connects owners with community housing groups to address homelessness by making vacant buildings available for short-term accommodation.  

The Canberra Times, 4 August, 2026
 

“Developer Lendlease, alongside Nippon Steel Kowa Real Estate (NSKRE) and Tokyo Tatemono, have topped out at the 899 Collins Street Build to Rent development in Melbourne’s Docklands.”  read more… 

The 24-level development will 499 studio, one- two- and three-bedroom build-to-rent apartments with views on the Yarra River and Victoria Harbour.  

btr news Australia, 4 August, 2026
 

“Prosper has won approval for its $92-million apartment complex at St Ives, fringing a golf course and a shopping mall in the Ku-Ring-Gai council area.”  read more…

The developer has been granted approval to for a mid-rise development in St Ives, offering 74 homes and a golf simulator facility to support the neighbouring Pymble golf club.

The Urban Developer, 3 August, 2026
 

"Zagga cautions investors not to confuse a cycle with a crisis, and calls for discipline, due diligence, and a focus on quality to navigate current market conditions.”  read more…

The private credit company’s special report suggests that we’re currently in a credit cycle, rather than a crisis.  It says that resilient employment, strong population growth, migration-backed housing demand and a well-capitalised banking system is helping to offset a softer property market.

The Australian, 3 August, 2026
 

“Last month, the Surry Hills Village by TOGA which includes the Eve Hotel won the Urban Taskforce Australia’s 2026 Development of the Year.”  read more…

The article, about investments in pubs, written in response to the $5 million makeover of the Imperial Hotel, showcased in Priscilla, Queen of the Desert, refers to TOGA's DEA success.  

SMH, 31 July, 2026

“Under a massive project between Holdmark Property Group and Western Sydney University, the purpose-built accommodation at 10 Valentine Ave, opposite the train station, would include a dedicated study and breakout areas, gym and yoga facilities, music and jam rooms, rooftop”  read more…  

The $100 million project, which will transform an office block into homes, is ideally located to university campuses and services within the Parramatta CBD, but the local council is opposed to more housing within the CBD. 

Parramatta Advertiser, 30 July, 2026

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