Chamber warns of housing crisis

The Peninsula may face a housing crisis, due to the combined effects of the global financial crisis and Gosford's new planning controls.

This is the view of Peninsula Chamber of Commerce president, Mr Matthew Wales.

"Tough lending policies could well lead to a housing crisis as existing housing stock is sold off and new starts falter," he said.

"The Draft Gosford LEP and the new DCP controls are (also) going to make residential development much tougher and, in my view, will lower site yields across the Gosford LGA.

"This will do nothing for housing affordability."

He said the global financial crisis had already seen several new development projects stall.

These included projects such as the seniors living developments at Veron Rd, Woy Woy, and at West St, Umina, as well as the Umina Aldi supermarket, which has been delayed for well over a year.

Mr Wales said the crisis had made funding these types of developments "extremely difficult" and had resulted in numerous projects stalling.

"Banks are demanding greater pre-sales and valuing down the retail product so as to ensure that they are not over-exposed," Mr Wales said.

"This means that developers must achieve much higher pre-sales and ensure that they have the cash to make up any shortfall in the finance.

"The crisis also cleaned out a lot of the mezzanine lenders who in the past lent money to bridge the finance gap.

"There are some good signs however as we have started to see more pre-planning work for residential flat buildings, particularly in Sydney."

Media statement, 8 Sep 2010 Matthew Wales, Peninsula Chamber of Commerce