Private sector home approvals decline again: latest figures

01 July 2010

Today’s Australian Bureau of Statistics May home approval figures show the impact of the Federal government’s public housing stimulus continues to wane, but private sector approvals are also in decline.

The Urban Taskforce’s chief executive, Aaron Gadiel, said that there was a 21 per cent seasonally adjusted decline in public housing approvals across Australia in May – delivering the lowest level of monthly public housing approvals since October last year.


Seasonally adjusted public housing approvals have declined by 54 per cent since their peak in March.


“May has seen private sector home approvals fall by a seasonally adjusted 5.3 per cent,” Mr Gadiel said.


Seasonally adjusted private sector home approvals have plummeted by 9.7 per cent since December.


“Private sector activity isn’t increasing to make up for the fall in public housing approvals,” Mr Gadiel said.


“The decline that we have seen in private sector home approvals since December points to a larger national housing undersupply, now nearing 200,000 homes.


Mr Gadiel said that NSW hit an extreme low in 2009, so it was pleasing that there had been some improvement in its performance.


May saw a modest 3.8 per cent increase in seasonally adjusted NSW private sector home approvals. In seasonally adjusted terms, NSW private sector home approvals have increased by 6.5 per cent since December.


“This is sharp contrast with Victoria and Queensland which saw seasonally adjusted falls in May private sector home approvals of 3.2 per cent and 8.2 per cent respectively,” Mr Gadiel said.


“Victoria has fallen by a total of 19.1 per cent since December, while Queensland has declined by 7 per cent.”


Mr Gadiel said the relative strength in NSW reflected the very poor performance of the state in 2009 and hopes that government was serious about reforming the planning system.


“All-up, NSW is still trailing Victoria and Queensland, despite their smaller population bases.


“Despite its seasonally adjusted decline, May saw the highest number of private sector home approvals in Victoria for any May since 2002, while NSW suffered the third worst on record.


In May, only 2,700 new private sector homes were approved in NSW, while 4,300 homes were approved in Victoria and in Queensland, with its smaller population base, 2,400 homes were approved.


Mr Gadiel said that urgent reform of town planning laws was essential.


“Government officials are due to report back to the Council of Australian Governments this month on the reform of zoning, planning processes and development levies,” he said.


“Today’s figures tell us how urgent this reform process really is.”


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.

Note: Illustrative graphs are in attached PDF below.



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