08 November 2008
Todays NSW Government announcement that it will increase the first homeowners grant for newly-constructed homes by $3,000 was a sensible measure, according to the Urban Taskforce.
Mr Gadiel, said that the NSW decision will help reverse the decline in housing construction but that local councils must now follow with urgent action of their own.
The lack of new housing supply is hurting people across NSW, particularly in Sydney and the Hunter, Mr Gadiel said.
Without a strong supply of new housing, rents will continue to sky rocket and first home buyers will struggle even more to save a deposit for a home of their own.
Credit rationing by lenders has made new property development projects almost impossible. Even projects already in the pipeline are in jeopardy.
Mr Gadiel said that NSW had been hit particularly hard. This weeks Australian Bureau of Statistics figures reveal a massive drop in NSW home approvals.
In September, seasonally adjusted home approvals in NSW fell by 26 per cent, while Victoria saw only a 4 per cent fall. In contrast, Queensland home approvals increased by 3 per cent.
Approvals for apartments and townhouses plummeted by 48 per cent.
In NSW anti-development sentiment and higher development costs have meant a more rapid fall-off in investment than in other states, Mr Gadiel said.
A complete collapse in property development will be disastrous for the NSW economy.
The construction activity made possible by property developers is Australias third largest source of employment.
Todays action is a positive for housing development, although it may not be enough to overcome the planned increase in land tax.
Yesterday the State Government confirmed that there would be an increase in land tax on investment properties valued in excess of a reported $2.25 million, from 1.6 to 2 per cent a year a 25 per cent increase.
This increase will reduce the incentive to acquire land for development in NSW, Mr Gadiel said.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
