2 August 2011
New figures released by the Australian Bureau of Statics today reveal that NSWs private sector home approval rate is plummeting at more than three times the national rate and the value of approved business premises is in freefall.
The Urban Taskforces chief executive, Aaron Gadiel, said these figures suggest that the state was now facing a clear and present danger of serious declines in private sector building activity.
NSW already produces less new housing than any other state or territory per head of population, Mr Gadiel said.
But these figures indicate that NSWs performance, relative to other states, may get even worse.
Building approval figures are significant, because they are an indicator of likely construction activity in around 18 months time.
Mr Gadiel said that in trend terms, new private sector home approvals fell nationally by 1.4 per cent in June, but they fell by 4.8 per cent in NSW.
Weve now seen three straight months, where the NSW private sector home approvals have trended down by more than 4 per cent a month, he said.
Since March, thats added up to a 12.6 per cent decline in new private sector home approvals.
Thats more than double the rate of decline suffered by Victoria in the same three months 5.6 per cent.
Its more than three times the rate of decline seen in Western Australia – 3.2 per cent.
And it contrasts with Queenslands improvement, in trend terms, over the same period by 0.7 per cent.
Mr Gadiel said that, in June, Victoria managed to approve close to 4,700 new private sector homes, while NSW approved just over 2,200.
Even Queensland approved more new private sector homes than NSW, Mr Gadiel said.
Mr Gadiel said that NSWs problems arent just confined to new housing.
The value of non-residential building approvals in NSW has fallen by 57 per cent since March, he said.
In the same period, Victorias has increased by 5 per cent.
Of all the states, in trend terms, NSW is suffering the sharpest decline in the approval value of new business premises.
NSWs 11.8 per cent fall in June compares with a negligible 0.3 per cent fall in Victoria, a 3.7 per cent fall in Queensland, a 4.5 per cent fall in South Australia and a 6.6 per cent increase in Western Australia.
Thats a serious sign that NSW isnt going to see the construction of new shops, workplaces and other business premises that the state desperately requires.
Mr Gadiel said the building industry was facing challenges in many parts of Australia.
However, there is clearly as systemic problem in NSW, that is unique to this state alone, he said.
Urgent, NSW-specific solutions are required if we are to avoid serious consequences.
This will require urgent interim planning reforms to encourage more investment in the state, delivered now, rather than in 18 months time.
It will also necessitate the abolition or dramatic reform of development levies.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
