NEW data has revealed home construction activity in Queensland has experienced the greatest increase in Australia.
Australian Bureau of Statistics figures show detached home building approvals rose by 16.4 per cent in August. Total Queensland approvals were up 19.6 per cent in the same month when apartment approvals were included.
The Urban Development Institute of Australia Queensland says the jump is partly due to the $10,000 Queensland Building Boost, which took effect on August 1.
However, UDIA policy and research director Duncan Maclaine warns it will take at least one month before the boost’s effect is fully revealed due to the delay between contract signing and building approval.
“It will depend on confidence in the sector, what happens to interest rates. If the economy strengthens between now and February, we hope there will be a seamless continuation once the grant ends,” he says.
“When the first-home owner grant was increased from $7000 to $21,000 for new houses in late 2008, we saw big increases in new home sales and building approvals – but interest rates were also being cut from 7 to 3.5 per cent.”
Master Builders executive director Graham Cuthbert welcomed today’s decision by the Reserve Bank of Australia to keep interest rates on hold at 4.75 per cent.
“For any increase in activity to occur, we must also see an improvement in consumer confidence, which can only be achieved through an assurance of the long-term stability of interest rates,” he says.
“Given the most recent developments in the global economy, they’ve made a sensible decision today in keeping rates on hold once again, which will hopefully help our industry to achieve a sustainable, long-term recovery.”
UDIA is asking Queensland Deputy Premier Andrew Fraser to extend the boost if building activity does not improve.
“$140 million in funding was put aside to assist the construction industry. If the uptake has been well below that projected, we would still like to see that money put aside to benefit the industry,” says Maclaine.
UDIA claims the housing industry is one of the highest taxed in the country.
“We have local, state and federal government levies including stamp duty, infrastructure charges and GST. Research from the Housing Industry Association shows one-third of the market price is just to cover taxes,” says Maclaine.
“Taxes need to be reduced to address housing affordability; there shouldn’t be any more taxes. Some of the burden should be shifted off the industry (because) it isn’t the developer who cops it - it’s the purchaser.”
Get our daily business news
Sign up to our free email news updates.