25 August 2010
In the last financial year Australias public building activity doubled while private sector building declined by 7.3 per cent, according to figures released by the Australian Bureau of Statistics today. The Urban Taskforces chief executive, Aaron Gadiel, said the figures showed how dependant the building industry had been on federal economic stimulus.
The overall 4 per cent increase in the real value of building activity was only achieved through a doubling of the public sectors building spend, Mr Gadiel said.
The 95.4 per cent increase in public building in the 2009/2010 dwarfs the previous years increase of 12.5 per cent which, in turn, followed a flat 2007/2008.
Mr Gadiel said the three months to June saw the first sizeable increase in the real value of private sector building activity in the 2009/2010 year.
In seasonally adjusted terms, private building activity jumped by 4.7 per cent, compared with a fall of 1.9 per cent over the first nine months of the financial year, Mr Gadiel said.
The growth of public building activity slowed in the June quarter, but it was still outpacing the growth in private sector activity.
Public sector building grew by a seasonally adjusted 7.5 per cent in the three months to June, moderating the double digit growth in the public building spend over each of the first three quarters of the financial year.
Mr Gadiel said these figures suggest that any rapid withdrawal of the school building program would be very risky.
However, government clearly needs to strengthen opportunities for the private sector to pick-up the slack created by the gradual wind down of the federal economic stimulus, he said.
The systematic problems in town planning laws need to be addressed.
The current national housing shortfall is 178,000 homes, with a projection for it to grow to 308,000 dwellings over the next four years.
The most recent assessment from the National Housing Supply Council warned that planning approval and development assessment processes generally add time, uncertainty and costs to the development process.
They concluded that the constraints would make it difficult to supply enough housing in south-east Queensland, Melbourne, NSW and Perth, Mr Gadiel said.
Its remarkable that we have just got through a federal election campaign with the issue being barely addressed by either of the major parties.
Whoever takes office in the next two weeks will need to grapple with this challenge.
Mr Gadiel said the seasonally adjusted real value of new residential building construction in the June quarter increased by 6.4 per cent in NSW, 10 per cent in Victoria and 13.1 per cent in Queensland.
In the June quarter, for every dollar spent in building new homes in NSW, six dollars was spent in Victoria and four dollars was spent in Queensland, he said.
NSW is clearly struggling in its efforts to get residential construction re-started.
Mr Gadiel said that NSW fared better in non-residential private sector building activity where the June quarter saw a seasonally adjusted increase of 3.3 per cent, compared to a 3.1 per cent decline in Victoria and a relatively modest 0.7 per cent increase in Queensland.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
Illustrative graphs are in the PDF below.
