14 October 2008
Todays Federal Government announcement that it will triple the first homeowners grant for newly-constructed homes will help boost Australias housing supply but only if authorities quickly respond with additional planning approvals, according to the Urban Taskforce.
The Taskforces chief executive, Aaron Gadiel, said that the Federal Governments decision will help reverse the decline in housing construction, but the states and local councils must now follow with urgent action of their own.
The lack of new housing supply is hurting people across Australia, particularly in Sydney, Mr Gadiel said.
Without a strong supply of new housing, rents will continue to sky rocket and first home buyers will struggle even more to save a deposit for a home of their own.
High interest rates and credit rationing by lenders have made new property development projects almost impossible. Even projects already in the pipeline are in jeopardy.
A complete collapse in property development will be disastrous for the Australian economy.
The construction activity made possible by property developers contributes $69 billion to the national economy each year and creates 709,000 direct jobs.
Its Australias third largest employer.
Todays decisive action will boost confidence in housing development.
According to Australian Bureau of Statistics figures released yesterday, 157,000 homes were built in the last financial year.
The rate of home construction is 10 per cent lower than it was four years ago, Mr Gadiel said.
We should be building a lot more housing to keep up with increased population and demographic change.
NSW is letting Australia down the most with only 31,000 homes built last financial year down from 48,000 only four years ago.
Mr Gadiel said the measure would work best if other levels of government took action.
The extra grant will expire in only eight months, Mr Gadiel said.
The grant will be useless if extra homes arent approved by state and local governments.
Local councils and planning authorities should now work hard to issue approvals quickly.
If there are no extra approvals given between now and Christmas, home buyers will miss out.
State government and local councils also need to slash development levies.
Development levies of $70,000 – $90,000 for each new home in Western Sydney are unaffordable.
Queensland and Victoria have seen a steady production of new houses, but in NSW, house construction is at an all time low.
The greatest challenge will be to get the approvals for major residential projects in NSW quickly finalised so that home buyers will have somewhere to spend their grant.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
