The NSW Government’s review of potential housing opportunities reported in the media today shows the government’s commitment to boosting housing supply and increasing affordability in a common-sense and transparent way, UDIA NSW believes. In what is one of the biggest steps forward for NSW housing supply for years, the Government has given a commitment to pursuing housing opportunities where the landholdings are, rather than designated growth areas that suffer major land fragmentation issues. Late last year Planning and Infrastructure Minister Brad Hazzard made a public call to developers with large landholdings, close to infrastructure, to approach the State Government with their projects, in recognition that residential development in NSW had stagnated for many years. This month, the Government published online the results of that process: a list of 43 sites which are potential candidates for rezoning for urban development under the Review of Potential Housing Opportunities on Landowner Nominated Sites. In the Sydney region, the sites are in the local government areas of Auburn, Blacktown, Camden, Campbelltown, City of Sydney, Hornsby, Liverpool, Penrith, Pittwater, Sutherland, The Hills, and Wollondilly. Regionally, the sites are in the local government areas of Cessnock, Clarence Valley, Hawkesbury, Port Stephens, Wingecarribee, and Wyong. Submissions closed on November 29 and the review process is predicted to be finalised in the first quarter of this year. The projects are being assessed on three criteria, according to the Department of Planning and Infrastructure’s website: 1. Housing delivery: The site is suitable for urban development and has viable prospects to produce houses in the short term. 2. Infrastructure: Infrastructure and services for new communities will be delivered in a timely and efficient manner and at no additional cost to Government. 3. Strategic setting: The proposal supports the broadly planned pattern of growth and urban policies. The process is governed by a Chief Executives’ Review Committee, which is chaired by the Director-General of the Department of Premier & Cabinet. Recommendations will then be made to State Government. Consultation will take place with the relevant Councils to seek their feedback on the proposals. Today, in the Sydney Morning Herald, Minister for Planning and Infrastructure Brad Hazzard said many of the nominated sites were outside the growth centres and that the growth centres strategy had failed. “The lines on the maps for the growth centres are supposed to encourage development in those areas, but it has not worked and the corollary has been it deterred development outside these lines,’’ Mr Hazzard told the newspaper. UDIA NSW believes this process shows the government is deeply committed to fostering housing growth and that it is also being transparent about the process and consultative with councils, which is essential. UDIA NSW Chief Executive Stephen Albin said says he believes the process is a realistic approach to fostering development where the landholdings are, rather than simply rezoning land in areas of fragmented ownership. “Our own research, which we have put to Government, clearly shows that the large sites where the landowners have been ready, willing but not yet able to develop are largely outside the growth centres,’’ he said. “It is clear, for the state to meet its future population and economic growth targets, that the process needs to take into account achievable development rather than operating off a wish-list that may not be viable or achievable.’’ “We support development that is led by the realities of the industry, whether it is inside or outside a growth centre – so long as it is commercially viable, sustainable, and supported by the appropriate infrastructure.’’ “As an industry group, we feel it is important to stress that this process is one that will benefit the state as a whole, in terms of housing affordability and economic growth.’’

Thank you to UDIA NSW for this Article

Based on ABS data released this week, a surge in construction activity commenced over the September quarter with the total value of work completed increasing by 12.5%. Most of the rise was driven by engineering works (up 22.6%) while the building sector saw an increase of just 0.6% in value over the quarter. Looking deeper into the figures, residential construction hasn’t seen any of the improvement with the value of construction work down 1.1% over the quarter and 3.9% lower over the year. The stronger than expected construction figures highlight the two speed nature of the economy. The value of engineering work (mostly attributable to the resources sector) was up 22.6% over the quarter and 48.9% over the year while construction activity across the non-resources sector remains pretty much flat.

The RP Data-Rismark Home Value Index results for October 2011 will be released on Wednesday of next week. The results, which will reflect market conditions pre-rate drop, are likely to see a continuation in the weak trend that has been evident since the start of the year, however recent months have seen value declines levelling. In October, consumer confidence was still low, together with a high volume of stock available for sale, low auction clearance rates and interest rates at an above average level which suggests more of the same conditions. Given that October was the last month in which official interest rates were at 4.75% before the 25 basis point cut in November, the next few months of data will be interesting to analyse to see if volumes or values show any inprovement.

Thank you to R P Data for this Article

Thank you to R P Data for this Article

22,771,649. That’s the estimated total of Australia’s population.  According to the Australian Bureau of Statistics there is one birth every 1 minute and 46 seconds and an Australian dies every 3 minutes and 40 seconds.  Every 2 minutes and 44 seconds there is another international migrant crossing the Australian border.  Overall the Australian population increases by one person every 1 minute and 31 seconds.

Population and more importantly, the change in population, is intrinsically linked with housing demand.  To put it simply, more people means more homes.

Unfortunately, for such an important indicator, we only see quarterly updates of Australia’s population estimates at a macro level (ie national and state).  More geographically granular updates are released only annually.  Additionally, there is a long time lag for updating population data.   The official estimates at a state and national level are currently up to date as at March 2011 with the June quarter estimates due to be released on December 19^th.

As can be seen from the graph below, total population growth has eased since peaking back in the March quarter of 2008 (+0.63% over the quarter – note that there is some seasonality in population growth and Q1 typically shows a higher rate of growth than other periods).  Part of the slow down can be attributed to the migration cuts brought in by the Federal Labor Government (the migration intake quota was virtually halved).  Additionally we have seen a swift rise in the number of permanent and long term departures from Australia which has only recently started to reverse.

In fact, based on the more timely migration data released by the ABS (migration data is released monthly, about a month and a half in arrears – so quite a timely data set in comparison with the demographic statistics report which is quarterly and released about six months in arrears) we are now seeing an ongoing trend of higher net migration rates; fewer residents leaving and more new or returning residents arriving.  The migration data is also quite seasonal, with spikes being recorded during February and July each year.

On a rolling annual basis, the September results for net migration were the highest since August 2010.  This is likely the result of the improved migration intake, with the Federal Budget announcing a 10.5% uplift in the skilled migrant intake and a 7.4% increase in the number of migrant families.   The trend of fewer long term and permanent resident departures is also helping to drive the net migration figures upwards.

Almost without doubt, as the ABS progressively release the new demographic data for the June and September quarters of this year we will see an improvement in population growth figures.  Theoretically the uplift in population growth should translate to greater housing demand; so we should start seeing that reflected in some improved dwelling approval and commencement figures.  That will be a welcome development by the residential building sector where the latest construction data from the ABS showed the value of residential construction was down 3.9% over the year.

Thank you Tim Lawless from RP Data for this article

The  building  home approvals  figures  released  by the Australian  Bureau  of  Statistics  today  for September, have NSW’s approvals at half that of Victoria which has a lower population. For every 10,000 people NSW has 47 approvals to Victoria’s 109 approvals and Queensland’s 73. NSW was the lowest in Australia on a per capita basis.

The  Urban  Taskforce’s  chief  executive,  Chris  Johnson  said  “while  the  previous  month of  August did show a more positive trend for NSW this seems to have been due to unusual circumstances”. “These results for September 2011  compared to ten years ago for the same period represent a34% reduction in home approvals, Chris Johnson said. 

“While it is admiral for the state government to announce the rezoning of thousands of housing lots in Western Sydney, the reality is that many of these are not turning into approvals.   This may well be due to high levies imposed on new housing lots in NSW. 

The  NSW government  needs  to address  this  critical  issue  as  to why   NSW is  lagging  so much behind other states”, Mr Johnson said  The  Urban  Taskforce  is  a property  development  industry  group,  representing  Australia’s  most prominent property developers and equity financiers.

Thank you Urban Taskforce for this article

Netstrata celebrated the Melbourne cup last week with a lunch and some team building games then we stopped to watch the big race.

Many thanks to lishas catering for the wonderful buffet they provided and well done to all those who spent time making their outfits and hats for the hat parade. It was a fantastic day enjoyed by all, even if we bet on the wrong horse.