The Hot And Cold Of Building Approvals

HIA Australia’s largest building industry association has released a new report entitled, ‘The Hot and Cold of New Home Building’. The report provides a clear picture of where there has been a rise and fall in building approvals over the past six months.

It identifies the ACT as having a number of the hottest building spots over the past six months.

‘White Hotspots’’ are where building approvals have risen very strongly, by 20 per cent or more over the six months to June.

HIA Executive Director for the ACT/Southern NSW said "The report found the districts of Woden Valley grew by 80 per cent and Tuggeranong by a massive 533 per cent."

"These two areas have come off a very low base. The Woden Valley provides an example of an area where the rapid escalation in land values in recent years continues to fuel a significant amount of knock-down, rebuild activity. Tuggeranong provides a relatively affordable area for medium density development, in addition to relatively affordable entry level housing."

The report also identifies a ‘Red Hotspot’, where growth in building approvals is greater than 10 per cent but less than 20 per cent. This was in Gungahlin-Hall.

The news, however, is not all good. There is a decline in apartment building approvals in 2008 and housing affordability has hampered production in 2008.

The report shows a decline in construction activity in North Canberra, Belconnen, Weston Creek-Stromlo and South Canberra. These areas referred to in the report as ‘Artic Cold Spots’ saw a relatively strong contraction in activity in 2008 when compared to the previous year.

"Eroding housing affordability and an end to the apartment building boom are the two key drivers behind these cold spots. More activity would occur in the cold spots if planning and development delays and add on costs of building were lower and less onerous," said Stuart Collins.

"Planning delays, combined with higher interest rates, will mean longer lead times for new construction. This is concerning given relatively strong population growth in the ACT and existing pressures in the private rental market," Stuart Collins added.

Building Spot - ACT
Building Spot	Building Approvals Jan-June 2008 Number	Building Approvals 6 mths to June 2008 Annual growth
RedHotspot      Gungahlin-Hall	321	15.9%
White Hotspot      Woden Valley      Tuggeranong	54 133	80.0% 533.3%
Arctic Blue Coldspot      North Canberra      Belconnen      Weston Creek-Stromlo      South Canberra	95 415 17 134	-37.9% -10.8% -37.0% -13.5%
Red Hotspot: Growth in approvals > 10% and < 20% White Hotspot: Growth in approvals > 20% Arctic Blue Coldspot: Contraction in approvals of at least 10% Source: Housing Industry Association

For a full copy of The Hot and Cold of New Home Building report (media only), please contact Kirsten Lewis on (02) 6245 1393