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Housing : July 2009
Industry Outlook growth driven, in part, by a once-ina-generation resources boom.’ ‘New SouthWales,’Ben adds, ‘also experienced a downturn, driven by persistent affordability woes in Sydney and surrounding regions.’ The other states mostly avoided the national drop in activity. Victoria grew over the past financial year and now accounts for nearly one in three new homes built across the nation. South Australia and Tasmania continued to achieve strong building numbers with their more affordable products, while the ACT and Northern Territory both had solid years. New South Wales has endured some tough times in its residential market. In five years NSWhas halved the production of new homes as its population has continued to grow at ever-stronger rates. The recent years of poor building are now driving record rents in a tight rental market. ‘On a more positive note,’Ben says, ‘the growth prospects for new housing in NSWappear strong at face value.’ HIA predicts growth of 18 per cent over the next financial year. This spirited growth sees NSWbuild 27,570 new homes next financial year. The long-term demand estimates for NSWremain close to 50,000 dwellings per year, based on recent strong population growth figures. Reaching this figure will continue to be stifled by the continued practice of high infrastructure charges and the state’s general affordability constraints. South Australia defied the odds in 2008/09 by managing to grow housing starts by five per cent – more than any other state The first home buyers boost, reduction in stamp duty for new houses under 600,000, lower interest rates and the federal government social housing boost will be the basis for an improved future for NSW. Victoria overtook Queensland as the largest builder of new homes in Australia in 2008/09. Appropriate land release and an associated affordability advantage over the other large states will see Victoria continue to outperform the rest of the nation this coming financial year. HIA expects the federal government fiscal stimulus and lower interest rates to help Victoria build more than 43,000 homes over 2009/10, three per cent up on an already healthy 2008/09. The Victorian 2009/10 budget promise to extend the first home buyer boost until the end of the financial year may see an even stronger year than anticipated. Population growth in Victoria continues to reach new highs and Melbourne attracts more new permanent residents than any other city in Australia. This strong growth suggests a promising future for the residential sector in Victoria. Queensland experienced a dramatic decline after its stellar 2007/08 financial year, with starts expected to drop back 35 per cent this current financial year. The state has been hit by the weakest property market in the country and the associated unwinding of the coal-led boom in the northern region of the state. ‘In spite of the doom and gloom in the Queensland residential sector, strong gains in the first home buyer end of the market will see it rebound in the next financial year,’Ben says. Along with the other positives from low interest rates and federal government social housing assistance, housing starts should gain 11 per cent to 32,530 dwellings (down from 45,000 two years prior). With the knowledge that dwelling approvals and housing loans are on the rise and given Queensland attracts the most permanent overseas and interstate migrants of any state, the long-term future seems bright for the sunshine state. South Australia defied the odds in 2008/09 by managing to grow housing starts by five per cent – more than any other state. Affordability remains key to the success of SA and the boost to the First Home Owners’Grant has more impact than other states, thanks to the lower house prices in SA. The continued strength of the leading indicators, building approvals and housing loans suggest that 2009/10 will remain a good one for SA. Factoring in 14 HOUSING JULY 2009