NSW enjoys some respite from housing stagnation

05 May 2011

New ABS figures released today paint a relatively positive picture of NSWs approval rate for new private sector homes over the last eight months, according to the Urban Taskforce.


The Taskforces chief executive, Aaron Gadiel, said NSW is still approving less new homes per person than any other state or territory, but new private sector home approvals had been consistently trending upward since August 2010.


In trend terms, weve seen a 19.3 per cent jump in NSWs private sector home approvals over this period, Mr Gadiel said.


This compares with Victoria, which has trended down by 7.1 per cent over the last five months,and Queensland, which has fallen by 15.2 per cent over four months.


Mr Gadiel said that seasonally adjusted approvals for private sector apartments and townhouses had soared by 22.6 per cent in March, following a 4.8 per cent increase in February.


1,609 new private sector apartments and townhouses were approved for construction in March in NSW, compared to just 1,038 in the same month last year, he said.


Mr Gadiel said that March saw a seasonally adjusted decline in NSWs private sector detached house approvals – by 5.5 per cent – but this followed a 9.5 per cent increase in February and a 2.3 per cent increase in January.


Overall, though, NSWs changes in private sector detached house approvals have been modest, with 1,505 approved in March this year, compared to 1,583 in March last year, he said.


Mr Gadiel said that NSWs improved performance could be partly attributed to the ˜NSW Home Builders Bonus.


Since July last year, home buyers do not pay stamp duty if they purchase a home worth up to $600,000 off-the-plan in the pre-construction stage. This saves home buyers up to $22,500.


At the same time there is a 25 per cent cut in stamp duty for those who buy later in the development process, once construction starts or a home is newly completed. This saves home buyers up to $5,600.


This measure has re-shaped NSWs stamp duty regime so that it is more supportive of new housing development, Mr Gadiel said.


Mr Gadiel said that Part 3A had played an important role in attracting investment to the state and ensuring that approvals were able to be given.


The challenge for NSW will be to maintain its improving position once the industry begins to feel the consequences of the repeal of Part 3A, he said.


Of course, NSWs overall performance is still shocking – when you either compare it to its own past history in the 1990s, or to the present day performance of other states. No state or territory approves less new homes per capita than NSW.


Mr Gadiel said that for every 10,000 residents, the Australian Capital Territory approves 127 homes a year, Victoria approves 109 homes, Western Australia approves 107 homes, South Australia approves 78 homes, Queensland approves 72 homes, the Northern Territory approves 66 homes,Tasmania approves 63 homes and NSW approves just 47 homes a year.


NSW approves less than half the number of homes, per person, than Victoria, the ACT and Western Australia, Mr Gadiel said.


NSW approves just two thirds the number of homes, per person, of Queensland and South Australia.


The OFarrell Governments promised reforms to the planning system and development levies cannot come quickly enough.


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


Download PDF Document