Building approvals in NSW lowest in 50 yrs

SYDNEY'S housing affordability crisis is set to deepen, with only 29,300 houses and units starting construction across NSW in the last financial year, the lowest level since the Bureau of Statistics started collecting data in 1969.

The BIS Shrapnel economist Rob Mellor said the figures were the lowest since the late 1950s.


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Hi Jacque,

... and next comes the accomodation crisis, closely followed by new financing arrangements (shared equity or more gov't incenctives) and the next up cycle.

Do you think we've reached the bottom yet?

Dave

 

Reached the bottom of which market?

If referring to Sydney, it's still a guessing game, due to the segmentation of the market- some suburbs experiencing rapid and rising growth (LNS, Inner West, Eastern suburbs) whilst others are still stagnant or falling (western suburbs, south-west). Auction clearance rates are climbing, however, despite the latest interest rate rise, hitting a four year high of 74% in Aug 2007 (CPM Research). The Sydney median house price is now $753K, up 5% in the yr to Aug 2007 and the median unit price is now $540K, up 7% over the year.

From what I'm experiencing for clients in the North Shore and Northern districts, demand is high, and more noticeably so as you get closer to the CBD. I still believe that June 2006 was probably the low point of the cycle for this part of Sydney, given the growth rates and activity since then.

As far as govt incentives go, it's a bit of a catch 22 situation, as no property owners want to see property prices drop yet the affordability issue is a red hot political issue, especially coming up to a federal election, with first home buyers wanting property to be cheaper!
No party has really come up with a truly workable solution that is going to be welcomed by all property participants- buyers, investors, tenants. However, more thought needs to go into the whole housing issue (with the suggestion that a minister needs to be alloted to deal with housing alone- a good start, in my opinion) rather than simple bandaid solutions such as FHOG increases or rebates on duties and property taxes.