New South Wales leads Australian new home building boom
New South Wales has become Australia’s top state for new home building with the state of Western Australia, dropping to second place and Victoria in third.
The latest biannual house report from the Housing Industry Associations shows that New South Wales is seeing strong levels of multi-unit dwelling construction and detached homes.
‘The buoyant housing market has played a significant role in elevating New South Wales up the rankings,’ said HIA economist, Geordan Murray, but he warned that the rapid price growth has intensified affordability pressures.
‘Lending figures reaffirm the challenges facing first home buyers. First home buyer lending highlights this as the weak spot in the housing market, and ranked New South Wales as the third weakest jurisdiction on this indicator,’ he explained.
The recovery in Queensland continued to gather momentum. The analysis shows the improvements can be attributed to a boost in multi-unit home building. The improvements lifted the state one place up the league table.
‘To maintain the positive momentum we’ll need to see the recovery broaden its base through improvements in detached house building and renovations activity,’ added Murray.
He also pointed out that in the post mining boom era, the focus has been on shifting the drivers of economic growth, which would see eastern states gain prominence. The latest Housing Scorecard highlights that it has been residential building that has picked up the first baton and led the charge.
Meanwhile, the HIA is warning that increasing the GST property tax on new housing to 15% will add tens of thousands of dollars to new home prices, crushing the dream of home ownership for many Australians.
‘New housing is already weighed down by the burden of tax. It is usually seen as an easy cash grab by governments Adding another 5% or more on top of the price of a new home will put housing out of reach of many people that are trying desperately to get into the market,’ said HIA chief executive for industry policy Graham Wolfe.
He pointed out that a 5% increase on a typical house and land package in Sydney, for example, would increase the cost of a mortgage by around $60,000 over the life of the loan.
‘Independent research has demonstrated that the total combined taxes, levies and charges on a new home can be up to 44% of the price of a new house and land package in Sydney. GST currently applies to new housing but not Wolfe.
‘We need more housing stock to accommodate our growing and aging population. Lifting the GST on new housing will dampen new housing activity. Increasing the burden on home buyers should be a no-go area for governments if they are really concerned about housing affordability,’ he added.