04 November 2010
Todays Australian Bureau of Statistics home approval figures for September show that NSW is continuing to bump along the bottom, while Queensland and Western Australia are clearly struggling and Victoria is still experiencing record-breaking approval rates. The Urban Taskforces chief executive, Aaron Gadiel, said September saw NSW experience its second worst level of private sector new home approvals since 1986 with just 2,500 homes approved.
Queensland saw its worst September in ten years with only 2,300 homes approved and Western Australia saw its second worst September since 2001 with just 1,600 homes approved, Mr Gadiel said.
In contrast Victoria experienced its best September ever, with 4,900 new private sector home approvals.
Victoria continues to escape the housing supply problems that dog other key states and NSW remains a stand out poor performer.
Mr Gadiel said the typically volatile seasonally adjusted monthly figures showed that private sector home approvals fell across Australia by 6.9 per cent in September.
Victoria saw a fall of 10.7 per cent – following four straight monthly increases, he said.
Queensland fell by 3.2 per cent and Western Australia fell by 8.4 per cent.
NSW defied the national trend with a 2.9 per cent increase; however this follows its 14.3 per cent decline in the previous month.
Mr Gadiel said that higher density home approvals account for the lions share of the fall, with a 15.7 per cent drop in seasonally adjusted private sector approvals across Australia, while private sector houses saw a comparatively modest drop of just 2.3 per cent.
New private sector house approvals have been trending negatively now for nine months across Australia, while higher density home approvals have been trending down for the last four months, Mr Gadiel said.
While the sustained decline in house approvals is evident across all key states, higher density approvals have been trending down in Western Australia for seven months, six months in Queensland, three months in NSW and for just one month in Victoria.
Nationwide public housing approvals of 500 dwellings are near to their pre-stimulus level (300-400), with little change from last month.
Mr Gadiel said the government should take two clear messages from these figures.
Firstly the housing supply is not robust enough and is at risk from higher interest rates.
Secondly more supply-side measures are required to allow more housing to be produced at the same cost base for developers.
This will necessarily involve reform of planning laws and lower development levies.
Were still waiting for the Federal government to release a reform agenda, prepared by Federal treasury, and originally promised by mid-year.
Its time these documents were made public.
No reform means an inadequate supply of housing, with significant economic and social costs for the whole community.
Mr Gadiel said that NSWs continued unwillingness to seek further planning reform and reduce development levies was clearly unwise.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
Note: Illustrative graphs are in the PDF available below.