Private sector home approvals up, but this is no reason to delay reform

03 February 2011

New private sector home approvals soared by 7.7 per cent in December across Australia, according to Australian Bureau of Statistics figures released today. The Urban Taskforces chief executive, Aaron Gadiel said the private sector numbers are encouraging, although this is not yet the sustained recovery that the industry has been hoping for.


The 21.3 per cent surge in private sector higher density home approvals is very welcome, even if this is partly a reversal of Novembers 6.4 per cent fall, Mr Gadiel said.


Private sector detached housing numbers are still low with virtually no change for four months straight.


The improvements were concentrated in NSW with a 25.1 per cent jump in private sector home approvals respectively.


Although, NSW is coming off a very low base. Victorias increase was more modest 3.7 per cent.


Queensland on the other hand suffered a 4.4 per cent fall and Western Australia fell by 1 per cent.


Mr Gadiel said the trend figures – which smooth out the volatile monthly data make it clear that there was no room for complacency about Australias housing supply.


Australia-wide, private sector detached housing approvals have been trending down for 13 months, he said.


NSW is trending positively, Queensland level, while Victoria and Western Australia are trending negatively.


Private sector apartment and townhouse approvals have been up across Australia for four straight months.


Proposals to reform the housing supply – promised at the April meeting of the Council of Australian Governments last year – are seven months overdue.


The federal and state governments cannot afford any more delays on the reform of Australias housing supply.


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


From July last year, no one pays stamp duty if they are buying 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 the stamp duty regime so that it supports new housing development, Mr Gadiel said.


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


Illustrative graphs are in the attached PDF below


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