New home starts up from last quarter, but down on last years figure

15 June 2011

The number of new home starts increased by a seasonally adjusted 3.1 per cent in the March quarter, on the back of an 11.5 per cent surge in medium and high density residential construction, according to figures released by the Australian Bureau of Statistics today.

The Urban Taskforces chief executive, Aaron Gadiel, said the increase was even sharper, when the declining numbers of public housing starts were taken out of the figures. 


Private section medium and high density residential dwelling construction starts increased by 14.6 per cent, compensating for a 1.9 per cent fall in private sector detached housing starts.


Mr Gadiel said that the increase on the previous quarter was welcome, but the numbers were still down when compared to the same quarter last year.


New home starts overall were 11.5 per cent down on figures for the 2010 March quarter, Mr Gadiel said.


Even when you factor out the declining government activity on public housing, the private sector was down by 2.5 per cent when compared to the March quarter last year.


Mr Gadiel said the states that saw a seasonally adjusted quarterly increase in overall new home starts were in Queensland (12.8 per cent); NSW (7.7 per cent) and Victoria (1.8 per cent), while falls were seen in Tasmania (9.3 per cent), Western Australia (4.5 per cent) and South Australia (2.9 per cent).


The quarterly increase in new home starts has primarily beendriven out of Queensland and NSW, Mr Gadiel said.


NSW has strongly benefited from its ˜Home Builder Bonus tax concession for off-the-plan purchases.


Clearly, though, the home building sector has not grown enough to compensate for the withdrawal of economic stimulus by the Federal Government.


Every level of government will need to consider what action it can take to boost new home starts.


The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.


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