Sick of reading about Federal Politics and watching “Harlem Shake” videos? Well don’t despair readers, here are some ABS property statistics to add some excitement to your day!
Housing and Lending Finance results typically begin the year on a weaker note and figures for this past January were no exception. Rather than focus on what’s transpired since December last year, let’s instead compare recent figures with those from a year ago.
Queensland Non-First Home Buyer (FHB) dwellings financed totalled 6,448 for January 2013, up 11.7% on the same month in 2012. Estimated investor numbers also saw improvement with approximately 3,253 dwelling financed, up 0.9% on January 2012. These results are a good indication of the turnaround that’s been slowly happening in the Queensland property market and let’s hope this positivity continues on throughout 2013.
In stark contrast however, FHB numbers sunk to new depths registering just 750 dwellings financed (down 52.6%), marking the lowest ever result since the ABS began publishing such data from 1991. Unsurprisingly, earlier this month saw the $15,000 “First Home Owners Construction Grant” rebranded as the “Great Start Grant”, with a reported $2 million to be spent on promoting the grant to the public. While it’s great to finally see some acknowledgement that this Grant may not be working as intended, perhaps more thought needs to go into the mechanisms that drive new property sales, rather than simply putting a couple of ads on television.
So why change the focus of the Grant to cover only newly constructed dwellings? Already slated as “one of the four pillars of the Queensland Economy”, construction has also been tipped by many (including the RBA) to take over the reins from the mining sector as the driver of Australia’s future economic growth. However much like the real estate sector, it too is an industry that’s been struggling in recent times.
Looking at Building Approvals data, Total Residential Building Approvals (excluding alternations, additions and conversions) in Queensland only rose by a mere 1% over 2012 to 27,774 (compared to a yearly average of around 41,500 dwellings approved between 2002-2007). Housing Approvals did improved over 2012 by 8%, but was largely negated by a 10% fall in unit and townhouse approvals.
However are newly constructed houses actually selling? New Home Sales figures (seasonally adjusted) from HIA would suggest otherwise. A quick look at their press releases over the latter half of 2012 showed consistent monthly falls in new homes sold within Queensland, despite improvements in other parts of Australia. In addition, residential developers earlier this year were reported as having to resort to offer rebates and discounts in order to sell stock.
Perfect timing for the “Great Start Grant” right? Well consider that FHBs historically have showed preference towards purchasing pre-existing properties, sold by owners who likely are the ones that in turn purchase these new dwellings. Does an extra $8,000 offer enough incentive for FHBs to go against this mechanism, changing their buying behaviour in what is one of the biggest purchasing decisions of their life? For the moment at least, it wouldn’t appear so.