42 per cent fall in economic stimulus housing and not enough private sector activity

01 June 2010

The end of the Federal government’s public housing stimulus is now in sight, but so far there is no compensating surge in private sector housing, according to today’s Australian Bureau of Statistics April home approval figures.

The Urban Taskforce’s chief executive, Aaron Gadiel, said that there was a 42.4 per cent seasonally adjusted decline in public housing approvals across Australia in April – delivering the lowest level of monthly public housing approvals since November last year.

 

“Private sector activity isn’t increasing to make up for the decline in public housing approvals,” Mr Gadiel said.

 

“Instead private sector home approvals are down by a seasonally adjusted 10.8 per cent.”

 

April saw significant falls in seasonally adjusted private sector home approvals in NSW (down 18 per cent) and Victoria (down 14.7 per cent), with a more modest drop in Queensland (2.6 per cent).

 

Mr Gadiel said that monthly approval figures can be volatile, but the trend was clear even when the first four months of the year were taken together.

 

“Since December, we’ve seen a 20.4 per cent decline in public housing approvals across Australia and a 5.9 per cent decline in private housing approvals,” he said.

 

“And since December private sector home approvals have declined 17.4 per cent in Victoria and by 2.5 per cent in NSW.

 

“Queensland has seen a flat result for the year to date, with just a minor increase of 0.3 per cent.

 

“This trend has got to worry anyone who is concerned about our housing supply, residential rents and the jobs of construction workers.”

 

NSW’s seasonally adjusted private sector detached house approvals fell by 9.4 per cent in April, following a rise in March since December these approvals have fallen by 12.6 per cent.

 

In April, NSW also saw a 27.9 per cent seasonally adjusted plunge in approvals for private sector apartments and townhouses, although, this may simply reflect a correction for the exceptionally strong NSW March figure. Since December, these approvals have increased by 16.9 per cent in seasonally adjusted terms.

 

“More, but not enough, NSW apartments and townhouses are being approved and less freestanding houses are being approved,” Mr Gadiel said.

 

“All-up, NSW is still trailing Victoria and Queensland, despite their smaller population bases.

 

“For every one private sector home that is approved for construction in NSW, two are approved in Victoria.

 

“NSW private sector home approvals are 10 per cent lower than Queensland.

 

“NSW has a long way to go before it will close the current 57,000 home shortfall in its housing supply.

 

“Similarly, the decline that we have seen in private sector home approvals since January points to continued growth in the undersupply at a national level 178,000 homes and counting.

 

Mr Gadiel said that urgent reform of town planning laws was essential.

 

“Government officials are due to report back, to the Council of Australian Governments on the reform of zoning, planning processes and development levies by the middle of the year,” he said.

 

“Today’s figures tells us how urgent this reform process really is.”

 

The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.

 

For every $1 million in construction expenditure, 27 jobs are created throughout the broader economy.

 

The construction activity made possible by property developers contributes $78 billion to the national economy each year and creates 849,000 direct jobs.


Note: Illustrative graphs are in the PDF below.

 

 

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