A recent report by Ray White Commercial Western Sydney has highlighted a growing concern in the region’s housing market — a widening gap between development approvals and actual construction.
According to the Western Sydney Residential Development Overview, around 80,000 dwellings have been approved or are in the pipeline, yet only 5,369 homes are currently being built across the region.
Despite Western Sydney accommodating the bulk of New South Wales’ population growth — accounting for 57.7% of the state’s increase and nearly 60% of all non-detached dwelling approvals — construction activity remains far below what’s needed.
In South Western Sydney, for example, just 519 homes are under construction compared to an estimated 7,335 required each year to meet demand.
Ray White Commercial Western Sydney Director Peter Vines described this as “a housing crisis hidden in plain sight,” noting that while figures may suggest progress on paper, real-world delivery is falling dangerously behind.
Although updated demographic modelling has reduced the region’s annual housing requirement to 25,636 dwellings (down from last year’s 33,596), the adjustment reflects shifting migration and housing pressures rather than a decrease in need.
Mr Vines noted that investor appetite remains strong and funding continues to flow, but a lack of available stock is stalling market momentum. The October expansion of the Home Guarantee Scheme is expected to increase demand, but without a boost in supply, it may drive prices higher rather than improve housing accessibility.
Western Sydney’s South West corridor — anchored by the upcoming Western Sydney Airport and major infrastructure projects — is set to become a thriving economic hub. However, Mr Vines warned that limited housing supply could undermine the success of these investments.
“If housing doesn’t keep up, the airport could become a policy failure,” he said.
While tens of thousands of homes sit in various stages of planning, progress is hampered by land constraints, funding challenges, and lengthy approval processes.
Some regions, including Parramatta and The Hills, are showing promise thanks to Transport Oriented Development (TOD) reforms, which aim to increase medium-density housing near transport hubs. Yet, outer areas like Camden and Liverpool continue to experience mounting housing stress, with limited policy support reaching these high-growth corridors.
As Vines concluded:
“Western Sydney isn’t just the future of NSW — it’s the present. But unless we turn plans into homes, we risk undermining the entire growth model.”
