04 November 2008
Todays 75 basis point cut means that the Reserve Bank and the Federal Government are singing from the same song sheet, but its now time for the NSW Government to join in, according to the Urban Taskforce.
The NSW property industry is in an extremely weak position, Mr Gadiel said.
Even before the recent rapid deterioration in the economic outlook, NSW was in decline and compared poorly with Victoria.
In NSW, the seasonally adjusted June quarter estimate of building work value fell by 3.7 per cent, while Victoria performed strongly with an increase of 3.8 per cent.
Unlike Queensland and Victoria, the value of NSW building work has been in freefall for four years straight.
Since 2003/2004, the real value of NSW building work has collapsed by 15 per cent; while over the same period in Victoria it has increased by 8 per cent in Queensland it has shot up by 21 per cent.
Property development is the backbone of the NSW economy.
Mr Gadiel said the Reserve Bank had now cut the cash rate by 1.75 per cent since early October. The Federal Government has also announced a $21,000 home grant for first home buyers purchasing newly built homes.
In next weeks mini-budget the NSW Government should take action to complement the Reserve Banks and the Federal Governments economic stimulus measures, Mr Gadiel said.
In the current environment, new house construction in Western Sydney will continue to be crippled as long as State Government insists on levies of $70,000 a new home, and councils are allowed to impose charges of up to $50,000 a home.
These charges must now be abolished, if the States economy is to be re-started.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
