Second worst February for home approvals in 10 years

31 March 2011

New figures from the Australian Bureau of Statistics today reveal that February saw the second lowest number of new private sector homes approved since 2001, according to the Urban Taskforce. Just 10,900 homes were approved across the nation, below last years February approval level of 12,300 homes.


The Urban Taskforces chief executive, Aaron Gadiel said that seasonally adjusted new private sector home approvals fell by 7.2 per cent in February across Australia, following a 9.6 per cent fall in January.


The biggest drops were in Victoria (21.4 per cent), Queensland (11.7 per cent), Western Australia (8.3 per cent) while approvals in NSW increased by 5.8 per cent.


New home approvals in NSW have been trending positively for six months, while theyve been trending down in Victoria for five months, and theyve been trending down in Queensland and Western Australia for three months, Mr Gadiel 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 supports new housing development, Mr Gadiel said.


Of course, this has to be put in perspective – in February NSW saw 2,500 private sector homes approved, while 3,800 were approved in Victoria, 1,600 in Queensland and 1,400 in Western Australia.


No state approves less new homes per head of population than NSW.


Mr Gadiel said that Queenslands numbers had been clearly hit by the floods and higher interests were generally influencing investment decisions across the country.


Australias systemic housing supply problems are set to continue, he said.


Interest rises have slowed down attempts to boost the housing supply to meet underlying community demand.


The main hope for the community is that a sustained government reform program lowers the costs of building new homes, making it possible to supply more homes without big price rises.


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


Note: Further illustrative graphs are in the PDF below.


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