By Terry Ryder, May 2026

Here’s the reality no politician wants to admit: governments aren’t solving the housing crisis—they’re causing it.

In Western Sydney, the numbers don’t lie. Developers are being hit with up to $100,000 in levies per apartment before a single brick is laid. Stack on GST, company tax, infrastructure charges, planning fees and a laundry list of other costs, and you’re staring at a system where every level of government is dipping into the same project.

The result? Projects don’t stack up. Not marginally unviable—completely unworkable.

Let’s call it what it is: a tax grab dressed up as “infrastructure funding.”

Yes, roads, schools and services matter. But the current model forces developers to bankroll public infrastructure upfront, loading costs onto new housing at a scale that kills feasibility. When you’re slugged $235,000 in taxes and charges on a typical apartment, or over $400,000 on a house-and-land package, you don’t have a housing market—you have a revenue machine.

And like any over-milked cow, it eventually stops producing.

Developers aren’t charities. If the numbers don’t work, they walk. That’s exactly what’s happening. Western Sydney—once the engine room of new housing supply—is being abandoned. Projects that made sense two years ago wouldn’t even get off the ground today.

This is the killer mechanism: governments push up charges → developers pull back supply → prices rise → governments blame “the market.”

It’s not the market. It’s policy.

Construction costs are already up around 50% in recent years. Add layers of taxes and charges, and developers have only two options: jack up prices or walk away. Increasingly, they’re choosing the latter—or shifting to lower-cost markets interstate where governments aren’t as aggressive on fees.

That’s why people are leaving Sydney. Brisbane and Melbourne aren’t magically cheaper—they’re just less punitive.

Meanwhile, Western Sydney—where two-thirds of future population growth is meant to land—is being strangled. Home ownership rates are falling faster there than the rest of Sydney. Supply is shrinking. Affordability is worsening.

And here’s the kicker: even a massive 10% increase in housing supply would barely move prices. So if supply is already constrained—and getting worse—you can see where this ends.

Higher prices. Lower ownership. More inequality.

All while governments collect record revenue from the very system they claim is “broken.”

There’s a simple fix, but it requires political courage: stop treating housing like a cash cow.

Infrastructure should be funded the way it always was—through broad-based taxation and long-term investment—not by slapping massive upfront costs on new housing. Shift contributions to completion, spread costs over time, or better yet, have state and federal governments fund the backbone infrastructure properly.

Because right now, the people paying are first-home buyers—through higher prices—and the people walking away are developers—because the maths no longer works.

You can’t tax your way to more housing.

And until governments stop milking the system, Western Sydney won’t get the homes it desperately needs.