Theres life yet in NSW property development: 35 per cent surge in apartment approvals

30 September 2009

Todays building approval figures suggest theres life yet in NSW property development, according to the Urban Taskforce.

The Taskforces chief executive, Aaron Gadiel, said that the August Australia Bureau of Statistics figures illustrate the impact of the NSW governments temporary stamp duty concession for new homes.


In seasonally adjusted terms, private sector new home approvals nationally fell only a 0.7 per cent which is basically level.


But in NSW theres been a seasonally adjusted 22.9 per cent surge in new home approvals by the private sector.


The temporary measures announced in NSW arent in place in Victoria and Queensland that could be one reason why Victoria suffered a 9.4 per cent fall, and Queensland only experienced a 1.2 per cent increase.


Mr Gadiel said the contrast was sharpest for apartments and townhouses. In NSW this sector has been hit hard by a lack of development finance and uncertainty about approvals.


In NSW August saw a seasonally adjusted 34.8 per cent surge in new approvals for private sector higher density homes, following an equally impressive 43.5 per cent surge in July.


In August, Victoria saw a seasonally adjusted 27.8 per cent fall in apartment and townhouse approvals and Queensland saw a 13.9 per cent drop.


Overall, new home construction has now been trending upwards in NSW for five straight months six straight months in Queensland and nine straight months in Victoria.


Under the NSW Governments Housing Construction Acceleration Plan, 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.


The stamp duty reduction for new homes, together with recent planning reforms, has helped restore some confidence in NSW, Mr Gadiel said.


Developers have been keen to secure approvals so that they can sell new homes off the plan under the six month-long stamp duty concession.


For a $400,000 purchase, theres a saving of just under $7,000 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.


Developers are responding to the state governments clear signal and are getting on with creating homes and jobs in NSW, Mr Gadiel said.


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 $69 billion to the national economy each year and creates 709,000 direct jobs. The construction industry is Australias third largest source of employment.

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