30 September 2010
A persistent decline in approvals for new detached houses, an across-the-board weakness in Queensland and the absence of strong recovery in NSW have all contributed to a decline in new home approvals in August, according to the Urban Taskforce. The Taskforces chief executive, Aaron Gadiel, said that todays Australian Bureau of Statistics figures show home approvals across Australia fell by a seasonally adjusted 4.7 per cent in August.
Mr Gadiel said that half this decline can be attributed to the anticipated drop off in public housing approvals as the Federal government economic stimulus program gradually winds down.
Once public housing is excluded, Australian private sector home approvals declined by a seasonally adjusted 2.4 per cent in August, Mr Gadiel said.
This follows declines in April and May, and relatively flat months in June and July.
Private sector home approvals have now been trending downwards for six straight months a fall of 7.2 per cent in that period.
Mr Gadiel said the fall in private sector home approvals was, in part, the result of a 14.8 per cent fall, in trend terms, in detached home approvals over the last eight months.
The lack of approvals of new private sector free-standing homes is a real problem, and the necessary consequence of high development levies in NSW and Queensland, he said.
Mr Gadiel said that in August private sector home approvals increased by 3.4 per cent, although Queenslands private sector home approvals have been trending downwards for six straight months – a 25.8 per cent fall over this period.
Queensland is weak in both private sector detached housing and higher density homes, and is dragging the national figures down, Mr Gadiel said.
In NSW August home approvals overall fell by a seasonally adjusted 16 per cent, and private home approvals fell by 13.7 per cent.
Detached housing approvals in NSW have been trending downward for 9 straight months a 14 per cent fall over this period, Mr Gadiel said.
Approvals for private sector apartments and townhouses have improved since the low figures of 2009, but are still way below the interstate levels and clear community requirements.
For every two private sector approvals for higher density homes issued in NSW, three are issued in Victoria.
NSW has nowhere near the recovery that is required to ensure its making a fair contribution to solving the national housing supply shortfall.
Mr Gadiel said that in Victoria overall home approvals fell by 1.4 per cent, but private home approvals rose by 0.6 per cent.
In terms of private sector home approvals, Victoria has had their best August since 2002, Mr Gadiel said.
This compares to NSW who just experienced its second worst August since 1983 and Queensland who just saw their worst August since 1986.
Mr Gadiel said that todays figures should spur on the Federal government to act swiftly on the urban policy reform agenda advocated by Treasury in the red book released last Friday.
Now is the time for the Federal Government to seize on Treasurys advice and make the changes necessary to reinvigorate our cities and prepare for future growth.
“States and local government should be prepared to co-operate in the implementation of this new national reform effort.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
Please see PDF below for graphs.
