31 March 2010
Less private homes were approved for construction in NSW in February this year, than any other February in the records of the Australian Bureau of Statistics, according to figures released today.
The Urban Taskforces chief executive, Aaron Gadiel, said Februarys approval rate was half the average for the last 26 years.
The situation in NSW is absolutely appalling, Mr Gadiel said.
In contrast with NSW, private home approvals soared in Queensland where they were 48.7 per cent higher than in February 2009 and Victoria where they were 25.1 per cent higher. Nationwide February private home approvals were up 21.4 per cent on the previous year.
NSW is weakest in private sector apartment and townhouse construction, with approval levels wallowing at nearly half the level of February 2009. Detached house approvals are up by 18.4 per cent on February last year, although house approvals are still well below either Victoria or Queensland.
Mr Gadiel said that governments and councils should not gloss over the problem by concentrating on public housing approval figures.
Three-quarters of the apartments and townhouses approved in NSW in February were actually public sector projects and this is artificially boosting the headline figures Mr Gadiel said.
Most NSW residents, including lower income households, will continue to depend on homes developed by the private sector.
The serious lack of private sector home approvals points to intolerably low levels of private sector home construction in the period ahead.
This has appalling implications for affordability and housing choice.
In seasonally adjusted terms, private sector home approvals plummeted in NSW by 18.3 per cent, when compared with January. In Queensland the same approval figure rose by 5.4 per cent and Victoria they fell by 1.6 per cent. There was an Australia-wide fall of 3.3 per cent.
In NSW there was a 31.5 per cent seasonally adjusted fall in apartment and townhouse approvals, compared to January.
Even when public housing projects are included, NSW home approvals still fell by a seasonally adjusted 14.6 per cent in February, in comparison with January.
In trend terms, NSW private sector home approvals have been falling for four straight months (down by 16 per cent), while in Victoria the trend has been positive for 14 months (up by 46 per cent) and in Queensland the trend has been positive for 12 straight months (up by 40 per cent).
Mr Gadiel said the message to be taken from these figures was absolutely clear.
There are serious and sustained structural problems with property development in NSW.
These problems are leading to NSW outcomes that are out of kilter with either Queensland or Victoria.
The bureaucratic inertia and high development levies imposed under the NSW planning system cant continue.
If it does, the whole community in NSW will ultimately be worse off.
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 attached PDF.
