Sydney, we have a problem with demolitions

One by one, in late 2023 and early 2024, the historic detached homes were bulldozed.

Now, all that remains is rubble and earth where 11 homes previously stood.

That’s the situation which greets visitors to a block at Canterbury in Sydney’s inner south-west (see progressive demolition photos below). 

Although the site is earmarked for high-rise redevelopment, no development application has been lodged to begin construction. 

Canterbury Bankstown Council, in which the site is lodged, is currently taking an average of 87 days to process these applications, meaning a further wait of at least several months before any construction can begin on the site.

The 11 homes at this site could have been accommodating families during a housing affordability crisis.

The demolition problem at the Canterbury site is one that is replicated right across the Sydney metropolitan area.

In 2016/17, Sydney was approving nearly 11 homes for every home which was approved to be demolished. 

However, since this time the ratio between new and demolished homes has collapsed.

In 2023/24, just five new homes were being approved for every one home demolished.

The problem is that, between 2016/17 and 2023/24, the number of demolition approvals have remained relatively consistent, while new home approvals and commencements have fallen. This is illustrated in the table below.

So why is this happening?

Well, firstly, it’s so easy to demolish homes.

Since 2009, it’s been possible to get a fast-tracked private certifier approval to demolish homes, if these homes are not heritage items or located in heritage areas.

What’s more, there’s no requirement – when seeking approval to demolish a home – to build something in its place. This means there are an alarming number of applications across Sydney for ‘demolition only’, which are then ticked off by private certifiers.

Then there are other changes which are likely to have driven the above figures.

These include the fact that:

• Sydney has turned from redeveloping industrial areas for new housing, which involve no home demolitions, to instead demolishing existing residential areas
• The boom in dual occupancy-style development, which has a very low new home to demolition ratio of 2:1
• Rising construction costs, which is increasing the number of sites where homes have been demolished, but nothing is replacing them.

However, it still remains a puzzle as to why developers are denying themselves rent by undertaking early evictions for demolition purposes, without any plans in place to replace the homes. It may be because they are keen to secure vacant possession of premises, for future development purposes.

Sydney though has to determine – is it happy with this situation?

The low new home to demolition ratio is making it so much harder for Sydney to fulfill its housing supply needs and contributing to the city’s waste crisis.

In 2022/23, construction and demolition waste generated 2.8 million tonnes of waste for landfill, more than any other waste stream. This is at a time when Sydney is due to run out of landfill space by 2030.

Simply increasing supply targets to compensate for demolitions wouldn’t seem to be the right approach, given the difficulties that developers and consent authorities are having even reaching existing targets.

Therefore, as a result of the demolition issue:

• Is it time to require a developer or landowner to have an approval to re-build a home, before demolishing a home?
• Should there be tax incentives to retain and re-adapt current homes? This would help Sydney better utilise existing housing stock, an issue further explored in this piece.
• Should there be a vacant land tax?
• And are dual occupancies leading to very low housing yield, therefore undermining housing supply efforts?

These are all questions which need to be answered to deal with Sydney’s demolition problem.