A report commissioned by a national industry body found the sector would produce construction worth $79.2 billion by the end of 2024, up from the record $75.5 billion in 2019.
But research agency The Insight Centre found an extra 150,000 construction workers will be needed in the next 15 years to meet the demands of an industry that has a huge role to play in delivering the homes needed to curb a housing crisis.
NSW must build 377,000 extra properties in the coming five years as part of its contribution to a nationally agreed target of 1.2 million new homes.
The report came as the state government on Tuesday revealed plans for more than 30,000 potential additional homes in rezoned areas at Homebush in Sydney's west, Bankstown in the city's southwest and Crows Nest in the north.
Up to 10 per cent of the homes are to be set aside for affordable housing run by community providers in Bankstown and Homebush, where the bulk of the extra planned properties will be built.
There will be concessions aimed at bolstering the night-time economy, involving special entertainment precincts and less stringent noise controls to support live music.
The construction industry is key to fixing the housing crisis but it has many of its own problems. (Dan Himbrechts/AAP PHOTOS)
The government was confronting the housing crisis in a bid to prevent an exodus of young people from NSW, Planning Minister Paul Scully told reporters.
"We're making sure that's done in conjunction with amenities, with transport, with jobs, because this is about ... not only supporting building better homes, but also better communities," he said.
The precincts will be subject to different planning rules as an accelerated precinct under the state's flagship transport-oriented development plans, with a focus on construction starting quickly.
Another 30,000 homes could be built under previously revealed rezoning across four suburbs in Sydney's north and northwest.
Property Council of Australia NSW executive director Katie Stevenson welcomed the additional rezoning plans, but called for the locations of more sites to be revealed so the industry could arrange capital and labour.
"With cold economic headwinds blowing through the construction sector and impacting project feasibility, we need to make sure we're working hand in hand to get these new homes built," she said.
The Insight Centre report, produced for industry redundancy fund Incolink, found high redundancy rates, skills shortages and mental health-related absenteeism would need addressing, with the workforce likely to rise from 300,000 to 450,000 in the next 15 years.
Major roadblocks could stop NSW from capitalising on the benefits of the forecast boom, Incolink said.
"Getting better support to these workers to address the financial and wellbeing challenges should be a major priority to keep workers in the sector," chief executive Erik Locke said.
The Master Builders Association has warned Australia's wider building and construction sector will need 500,000 extra workers to maintain business as usual, with more required to hit national housing targets.
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