04 November 2009
Todays building approval figures confirm that the NSW Governments Housing Construction Acceleration Plan (HCAP) must be extended beyond its scheduled expiry date, according to the Urban Taskforce.
In NSW seasonally adjusted approvals for new private sectors homes stayed roughly level (a 0.6 per cent decline). This followed a 15.8 per cent surge in the previous month, off the back of increased apartment and townhouse approvals.
The Taskforces chief executive, Aaron Gadiel, said the HCAP had successfully restored some confidence in NSW and led many developers to push for pending approvals to be finalised.
Under the HCAP, from 1 July until 31 December 2009 purchasers of newly constructed homes, other than first home buyers, only pay half the normal stamp duty on purchases of up to $600,000 in value.
NSW home approvals remained lacklustre, despite interstate improvements, until the state government announced these stamp duty concessions for investors and second home buyers, Mr Gadiel said.
According to NSW Government figures more than 1,000 new dwellings worth more than $445 million have been sold in NSW under HCAP.
Its only cost the government $7.8 million in lost stamp duty revenue, but its stimulated $445 million worth of job-supporting construction activity.
Its helped provide jobs for thousands of builders, plumbers, electricians and construction workers.
For a $400,000 purchase, theres a saving of just under $7,000 to a home-buyer and, for a $500,000 purchase, a saving of close to $9,000. The maximum benefit goes to a purchase of a $600,000 home, where the saving is just over $11,000.
This scheme is currently scheduled to end on 31 December.
These figures suggest a rebuilding of confidence in NSW – a premature end to the scheme will be disastrous.
The NSW Government should quickly move to extend the scheme.
Early advice on the future of the scheme will encourage developers to lodge additional development applications, with the hope that their approved projects can be marketed when the stamp duty concessions are still on offer.
NSW house approvals are at the highest number seen for the month of September since 2005. NSW approval for higher density homes is higher than September last year, but still well below September 2007.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
The construction activity made possible by property developers contributes $78 billion to the national economy each year and creates 849,000 direct jobs.
Further illustrative graphs are contained in the attached PDF below.
