Strong building approvals but actual activity less certain

Home Media Releases Strong building approvals but actual activity less certain

Strong building approvals but actual activity less certainQueensland is at a high water mark for building approvals, consistent with the national trend, however the strong figures mask a potential gap between approvals and actual starts. Nationally, the latest ABS data confirms the continued strength of the property and construction industries, which looks set to continue in 2015 with a seasonally adjusted 19,282 dwellings approved in January taking total national annualised approvals to a record-breaking 203,182. The Property Council of Australia’s QLD Executive Director Chris Mountford said “the record number of building approvals in the state aren’t translating into actual home builds, and the gulf between the two was cause for concern. “In our state 3526 dwellings were approved in January – part of the 38,774 homes approved in trend terms for the full year ending January 2014, which is a new record for building approvals in Queensland,” Mr Mountford said. “If these building approvals actually were built then the pipeline of residential activity would show the industry to be creating valuable supply, however it will be some time before we see if these numbers really do convert to starts. There is an emerging issue around building approvals not converting to actual starts due to costs, delays and obstructive policy settings. “That’s why reform is so vital, to ensure that the high approval numbers are translating into construction of the new homes needed to meet demand and keep a lid on prices. “And it’s yet another reason why we can’t afford to be discouraging foreign investment, which is so critical to turning approvals into actual builds. “The proposed new stamp duty on foreign investment will have an impact on the timely conversion of building approvals to starts. “Residential development is a powerhouse of the economy and we need to see some evidence-based policy. “There is also a gap in the data, with all forms of investment in residential development needing more attention. “We have here is a golden opportunity for national gains can be achieved for jobs, community prosperity and housing affordability when the residential development industry is at its best – let’s make sure Queensland doesn’t miss out.”The Property Council’s media release can be found below.