Queensland development industry future looks fragile
Queensland dwelling approvals are on a knife edge to plummet again, according to the latest construction industry performance data released by the Australian Bureau of Statistics.9.7.10
"The latest data shows the rate of approvals in some regions across the state has risen during the last quarter but this honeymoon period, caused by strong underlying demand for housing creating a gap between supply and demand, could well be over," said Queensland President of the Urban Development Institute of Australia (UDIA) Warren Harris.
"Demand will weaken as rising interest rates continue to bite and Queensland's population growth slows due to a reduction in international and interstate migration.
"Economic and political uncertainty is also dampening the enthusiasm of purchasers.
"As demand weakens, the level of building approvals will drop, and unemployment in the construction sector will continue to rise.
"Despite recent improvements, the rate of dwelling approvals still sits at 15% below the average of the pre-GFC years 2000-2008.
"Detached housing approvals sit at 10% below the average of these years, while unit approvals remain 20% below," Mr Harris said.
"It is well within the scope and power of government agencies at all levels to heed these clear indications and head-off another looming crisis in the industry.
"State and local government can directly stimulate output through reducing infrastructure charges and streamlining approval processes to make them more efficient in terms of cost and time.
"We've seen this strategy work positively for the industry on the Gold Coast and the Fraser Coast, where councils recently announced short-term concessions on infrastructure charging for projects that can start immediately.
"This will be a real boost for regional economies that have been devastated by the declining activity in the housing and construction sector.
"Government must address the fact that state-wide the rate of housing approvals has dropped 37% since June 2008 and approvals for detached dwellings and units have fallen 20%.
"Approvals remain 20% below the 2006-2008 years which also happen to be the SEQ Regional Plan targets.
"Trends show greater resilience in Brisbane, on the Darling Downs and the Mackay region," Mr Harris said.
"In Cairns, employment in the housing and construction sector has halved, while on the Gold Coast, and in the Wide Bay and Far North, there are grave concerns for local economies as employment in the construction sector continues to fall.
"We look forward to positive outcomes from Growth Management Queensland, the Infrastructure Task Force and the proposed infrastructure spending programmes, but there won't be any tangible results in the short-term, and in the meantime this remains a problem that must be addressed."
