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Urban Taskforce | Media Releases
Banks need to take responsibility for grim home approval figures
05 March 2009
The banks need to take responsibility for the grim home approval figures released today, according to Aaron Gadiel, chief executive of the Urban Taskforce.
These are horror figures, Mr Gadiel said.
In January this year, only 370 new medium and high density homes were approved in NSW.
This is less than in any previous January since the ABS began recording figures in 1983.
Its a 64 per cent drop in the same figure for the previous January and a 44 per cent fall, in seasonally adjusted terms, from December 2008.
Mr Gadiel said that just 808 new free-standing houses were approved in NSW in January a 30 per cent fall since the previous January figure.
Overall, 46 per cent less homes were approved for construction in January this year, compared to January last year, and there was a 19 per cent fall, in seasonally adjusted terms, since December 2008, he said.
Many developers are telling us that within six months they will have no major residential development projects under construction.
That means many thousands of construction workers and tradespeople could be without work.
Mr Gadiel said that the biggest single problem for the development industry was a lack of support from the banks. Despite benefitting from sweeping government guarantees banks are refusing to lend for development projects.
Even projects with significant pre-commitments are having enormous difficultly in securing finance.
Mr Gadiel said that maximum pressure needs to be put on the banks to deliver on their end of their bargain with the Federal Government. Mr Gadiel said the Federal Government should also move as quickly as possible to extend and increase the $21,000 grant to first home buyers for newly-built homes. The grant was announced in October last year as part of the first economic security package and is due to end on June 30.
The proportion of owner occupied home loans going to first home buyers shot up from 20 per cent (in September) to 25 per cent in December.
Mr Gadiel said that all levels of government needed to actively support the development industry by quickly dealing with development proposals.
The ABS data shows that home approvals in NSW have been trending negatively for 13 months with a 38 per cent fall over this period. Queensland has also been hard hit from a higher base where the trend has been negative for 15 months. Queensland has seen a 53 per cent fall in the home approvals trend figure over this period. Both states compare poorly with Victoria, which has been trending negatively for only six months, with a 14 per cent fall.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
For every $1 million in construction expenditure, 27 jobs are created throughout the broader economy. 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.
Please see attached PDF s for illustrative graphs.
