Victoria leads and NSW trails in residential construction

24 November 2010

New figures released by the Australian Bureau of Statistics today show that theres still more private sector building activity in Victoria and Queensland than in NSW. The Taskforces chief executive, Aaron Gadiel, said in the three months to September Victoria saw $3.2 billion of private sector residential building activity.


Victoria remains Australias number one state for residential construction, Mr Gadiel said.


Queensland came second with $1.952 billion in private sector residential building activity, while NSW was a close third, with $1.950 billion of activity.


Its remarkable that NSW has to battle it out with Queensland for second place, given that both Queensland and Victoria suffer the disadvantage of being less populous.


In terms of total private sector building activity (including commercial and retail developments), Victoria ran first with $5.2 billion of activity, NSW ranked second with $4.2 billion and Queensland came third with $3.3 billions worth of activity.


Across Australia, the September quarter saw a 2.3 per cent seasonally adjusted fall in new home building activity.


Unfortunately, this figure disguises whats happening in the private sector, because it includes the Federal Government public housing economic stimulus, Mr Gadiel said.


Once these figures are taken out, new home building by the private sector fell by 7.1 per cent more or less cancelling out the previous quarters rise of 7.4 per cent.


The picture varied across the states.


In seasonally adjusted terms, new home building in NSW dropped by 0.4 per cent in the September quarter, while it fell by 9.4 per cent in Victoria and fell by 16.5 per cent in Queensland.


Victorias 9.4 per cent fall is a partial reversal of the 17.2 per cent increase it experienced in the June quarter, while Queenslands 16.5 per cent fall merely reverses the 17.1 per cent increase it experienced in the previous quarter, Mr Gadiel said.


NSWs relatively minor fall in residential building activity represents the already depressed level of activity in that state, particularly since the June quarter increase of 10.4 per cent was modest in comparison with the other key states.


(These state-by-stage figures include public housing, as the ABS did not publish separate data for the private sector in this regard.)


Mr Gadiel said that NSW property development has been in serious decline since 2002.


Until 2007, NSW was the nations number one state for building activity this shouldnt have been surprising given that its Australias largest state, he said.


However, in 2007, Victoria stole NSWs title.


Victoria has never looked back in the last financial year, for every dollar spent by builders in NSW, $1.20 was spent in Victoria.


Its time the major political parties started articulating coherent plans to get residential construction going again in NSW.


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


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