New housing boom set to go through the roof

Thursday the 18th of June, 2009 11 Comments »

Posted by Iden Money .

(source: Sydney Morning Herald)

As New South Wales recorded its lowest figures for construction of new homes, developers have predicted the worst is over and the state is on the verge of a housing boom.

Bureau of Statistics data for the three months to March showed the number of new housing starts has fallen to 5400, down from 7500 in the same period last year and 11,000 five years ago.

However, the housing industry believes this week’s budget will help deliver a long-awaited turnaround. “There will be a boom,” said Stephen Albin, chief executive of the Urban Development Institute of Australia.

The acting head of the NSW division of the Property Council of Australia, Angus Nardi, agreed the budget announcement of a 50 per cent cut in stamp duty for the next six months on all new homes up to a value of $600,000 along with several other measures would see a dramatic change. “I think the Government has implemented a handful of measures that should bring about a boom in the residential market,” he said.

The Treasurer, Eric Roozendaal, signalled yesterday the Government may open further areas for development in measures to revive building activity.

“I suspect there will be further announcements about opening up other areas,” he said when asked whether additional measures were likely to boost housing construction.

Budget estimates from the Department of Planning confirm the Government is expecting a boom.

The upswing is most pronounced in the greater Sydney area with a 41 per cent increase in the number of homes built in the next 12 months.

The department estimates that 25,000 dwellings will be built next year, many of them apartment blocks in and around transport routes and in existing residential areas.

A senior economist with BIS Shrapnel, Jason Anderson, said the cut in stamp duty and other factors made an increase in housing construction levels certain but questioned whether it would be as big as the Government has forecast.

“I would be surprised if you got a response of that magnitude from a cut [in stamp duty] for six months,” he said.

He expected investors would begin entering agreements to buy apartments off the plan enabling developers to secure funding for these projects.

Forecast new dwellings over the next 12 months for NSW are City of Sydney  (2040),  Blacktown  (1863), Liverpool  (1325),  Parramatta  (1230),  Canada Bay  (1100),  Randwick  (980),  Penrith  (945)

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