17 March 2010
Figures released today reveal that 2009 was the worst year for the construction of new private sector homes since 1996, with NSW having the lowest such figure in Australian Bureau of Statistics record-keeping history and Queensland suffering its worst year since 1987.
In seasonally adjusted terms, the number of new dwellings commenced in December 2009 increased by 15.1 per cent across Australia compared with the previous quarter – by 16.5 per cent in NSW, 15.6 per cent in Victoria and 13.4 per cent in Queensland.
These increases are welcome given that the private sector was only responsible for work commencing on 132,000 new homes in 2009, compared with a previous 10 year average of 153,000 homes.
NSWs private sector produced 24,000 homes in 2009, less than half Victorias 45,000 homes and even less than Queenslands 27,000 homes.
In the last three months of 2009, private sector home construction was up across Australia, when compared with the same period in 2008, Mr Gadiel said.
Australia-wide it was up by 22.5 per cent – 21.2 per cent in NSW, 29.8 per cent in Victoria and 20.7 per cent in Queensland.
However, its clear that private sector apartment and townhouse construction is still in serious trouble in NSW, while its been growing in Victoria and Queensland.
In the December quarter, NSW private sector construction of higher density homes was 10.3 per cent lower than in the same period in 2008.
In fact the last quarters figure is 29.1 per cent lower than the same figure for same quarter in 2006.
This is NSWs lowest level of private sector apartment and townhouse construction for this quarter since 1987.
Mr Gadiel said that NSWs construction of new private sector apartments and townhouses was now easily outstripped by Victoria, where there was a 7.8 per cent increase in construction, when compared to the same quarter last year.
Victorias produced 11,000 private sector apartments and townhouses in 2009, compared to NSWs 8,000.
Victoria is experiencing its highest levels of private sector apartment and townhouse construction since 2002.
Things are looking better in Queensland too, where private sector apartment and townhouse construction has surged by 27.1 per cent, when comparing the 2009 December quarter with the same period in the previous year.
Overall, 2009 was not a great year for this type of development in Queensland with work starting on only 7,000 such homes, but at least, unlike NSW, the state seems to be recovering.
Mr Gadiel said the inability of NSW government to get private sector apartment and townhouse construction re-started was a serious concern.
Just last month, the NSW Government adjusted its targets increasing its reliance on apartment and townhouse construction to meet Sydneys future housing needs, he said.
The governments latest transport and land use strategy assumes that 70 per cent of the extra housing Sydney will need will come from higher density development in the existing urban area.
Thats up from a 60-70 per cent range in the governments 2005 Metropolitan Strategy.
In the Lower Hunter, the government is assuming that 40 per cent of future housing will come from existing urban areas.
Unless the NSW government can engineer a recovery in private sector apartment and townhouse construction, this wont happen.
Thats got to be a worry for anyone who might be looking to rent or buy a home in the coming years.
Mr Gadiel said that the Australian housing market was undersupplied to the tune of 200,000 homes.
NSWs current shortfall in housing is approaching 100,000 homes and, on current projections, will be near to 175,000 homes within four years, he said.
We are in the midst of a major development crisis.
State planning laws are still preventing vital urban development projects from taking place.
Developers still have great difficulty in securing bank finance for their projects.
Recent interest rate increases have also reduced the viability of development across Australia.
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.
