Australian Property News
Calls to ease development costs
Posted on Monday, March 29 2010 at 10:06 AM
Queensland has been revealed as one of the worst performing states in supplying housing to the market, according to a recent report released by Access Economics.
The report said the state had reached its lowest share of national activity in two decades and there’s a risk that up to 37,000 jobs could be shed in the short term.
Access Economics director Chris Richardson said the Queensland housing industry contracted sharply in 2009, with construction activity falling by around 8.5 per cent.
“Housing commencements have dropped by more than 30 per cent since mid-2008 and the industry faces notable holes in completions which could stretch through to next year and beyond.”
Richardson said housing investment has dropped across the state to below seven per cent of the Queensland economy, its lowest point since 2001.
“The Queensland population continues to rise at a rate of 2.5 per cent, however only one new home is being built for every 4.3 extra people added to the population,” Richardson said.
Demand is also outstripping a very weak supply, he said, pushing house prices up strongly and making them unaffordable to many Queenslanders.
Lack of bank finance is just the ‘straw that broke the camel’s back’, said Urban Development Institute of Australia Queensland president Warren Harris.
“Housing affordability is at historically low levels, interest rates look set to increase and mortgage stress is becoming increasingly evident.
“Land supply, approval delays and associated costs are adding further uncertainty among developers and increased taxes have been introduced, such as the recent massive jump in land tax as a result of the latest increase in land valuations,” he said.
Harris expressed that government needs to swiftly act in its budgetary response to reduce the financial pressure on developers so projects can be delivered.
“Likewise, we would ask government to defer upfront payment of infrastructure charges, so developers can pay at settlement rather than bearing additional costs and interest payments through the development phase,” said Harris.
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