15 July 2009
Todays final building activity figures for the March quarter reveal the full extent of the collapse in apartment and townhouse construction, with NSW being hardest hit, according to the Urban Taskforce.
The Taskforces chief executive, Aaron Gadiel, said NSW has been hit hardest.
In the March quarter, work started on 2,100 new apartments and townhouses in NSW, compared with 3,900 in the same quarter last year, Mr Gadiel said.
In these latest figures, NSWs share of national apartment and townhouse construction has plunged to 26 per cent from 33 per cent last year and Queenslands has fallen to 21 per cent from 25 per cent last year.
Victorias share of apartment and townhouse development has surged from 25 per cent to 32 per cent.
South Australias share of higher density home construction has doubled from 4 to 8 per cent.
Mr Gadiel said plunge in development was very bad news for Sydney.
Apartment and townhouse development has been accounting for 85 per cent of Sydneys housing growth, he said.
With this shortfall in new housing, we can see why Sydney rents are increasing by 11 per cent a year, when inflation is only 2.5 per cent.
Mr Gadiel said that todays figures also confirm that in the March quarter work started on less new homes in NSW than ever previously recorded by the Australian Bureau of Statistics.
Work started on only 5,200 homes in NSW, compared with 9,100 in Victoria, 5.300 in Queensland and 28,100 across Australia.
NSW accounts for 33 per cent of Australias population, but only 19 per cent of new home construction.
For every $1 million in construction expenditure, 27 jobs are created throughout the broader economy.
Mr Gadiel said that it was currently very difficult for property developers to secure finance for new development projects.
When developers are able to proceed, the community should be lining up to support them.
Local councils, the state government and the opposition should actively support efforts to re-start new home development in NSW.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
The construction activity made possible by property developers contributes $69 billion to the national economy each year and creates 709,000 direct jobs. The construction industry is Australias third largest source of employment.