Building hot spot in crisis as Queensland blamed for collapse of construction
Bridget Carter | May 29, 2009
Article from: The Australian
QUEENSLAND'S residential building sector has been brought to its knees by rocketing government charges, the credit crisis and a slump in demand from mining towns and holiday hot spots.
Just two years after Queensland boasted of being the nation's top performer for housing, it is now blamed for the lion's share of the spending decline for Australian home construction in the past six months.
According to the Australian Bureau of Statistics, the amount of money shelled out on residential building nationally plummeted by $617 million to $8.3billion between September and March. Queensland accounted for $587 million of that fall.
The property development industry's peak body, the Urban Development Institute of Australia, said in the previous six months - to September 2008 - spending gained slightly both in Queensland and throughout Australia by about $80,000 and $191,000 respectively.
The institute's Queensland president, Warren Harris, said the falls were alarming.
"We thought it (Queensland) would be 40 to 50 per cent of the national problem."
He said the weekly rate of homes built had halved to 400 in the past six months and 16,000 construction workers had lost their jobs since September, when there were about 224,000 across the state.
Lawrie Dore, chief executive of DJ Builders, based at Loganholme, in the greater Brisbane area, said his contract housing business had declined by a quarter in the past six months. "I had about 110 sub-contractors before Christmas and now I have about 20," he said.
"There are situations where 18 builders are tendering for the same job."
He said prices for building homes had also fallen substantially.
Jason Anderson, senior manager for building and construction for BIS Shrapnel, said housing approvals on the Gold Coast and Sunshine Coast were down 20 per cent for the 2008 calendar year, and 25 per cent in north Queensland, with holiday homes especially hard hit. This compared with a national average fall in housing approvals of 7 per cent.
Queensland-based lender Suncorp-Metway has become more stringent about its lending practices after being stung by bad debts left by developers which have gone bust. "For Queensland, 2007 was a great year and they have come down to earth with a thud," Mr Anderson said.
Queensland's property industry claims development application delays and infrastructure charges are part of the problem.
The state Government made about 40 per cent of its revenue from the construction industry and delays and charges were hitting developers hard through land holding costs, sources said. This was typically $1000 per lot per month, which was more than $1million annually for a 100-lot residential project.
Simple development applications were supposed to take 120 days to approve but were taking a year in Queensland, compared with about six months for Victoria, developers said.
The Government says it is introducing a priority infrastructure plan, under which developers shoulder much of the cost for infrastrucure work under way.
Bridget Carter | May 29, 2009
Article from: The Australian
QUEENSLAND'S residential building sector has been brought to its knees by rocketing government charges, the credit crisis and a slump in demand from mining towns and holiday hot spots.
Just two years after Queensland boasted of being the nation's top performer for housing, it is now blamed for the lion's share of the spending decline for Australian home construction in the past six months.
According to the Australian Bureau of Statistics, the amount of money shelled out on residential building nationally plummeted by $617 million to $8.3billion between September and March. Queensland accounted for $587 million of that fall.
The property development industry's peak body, the Urban Development Institute of Australia, said in the previous six months - to September 2008 - spending gained slightly both in Queensland and throughout Australia by about $80,000 and $191,000 respectively.
The institute's Queensland president, Warren Harris, said the falls were alarming.
"We thought it (Queensland) would be 40 to 50 per cent of the national problem."
He said the weekly rate of homes built had halved to 400 in the past six months and 16,000 construction workers had lost their jobs since September, when there were about 224,000 across the state.
Lawrie Dore, chief executive of DJ Builders, based at Loganholme, in the greater Brisbane area, said his contract housing business had declined by a quarter in the past six months. "I had about 110 sub-contractors before Christmas and now I have about 20," he said.
"There are situations where 18 builders are tendering for the same job."
He said prices for building homes had also fallen substantially.
Jason Anderson, senior manager for building and construction for BIS Shrapnel, said housing approvals on the Gold Coast and Sunshine Coast were down 20 per cent for the 2008 calendar year, and 25 per cent in north Queensland, with holiday homes especially hard hit. This compared with a national average fall in housing approvals of 7 per cent.
Queensland-based lender Suncorp-Metway has become more stringent about its lending practices after being stung by bad debts left by developers which have gone bust. "For Queensland, 2007 was a great year and they have come down to earth with a thud," Mr Anderson said.
Queensland's property industry claims development application delays and infrastructure charges are part of the problem.
The state Government made about 40 per cent of its revenue from the construction industry and delays and charges were hitting developers hard through land holding costs, sources said. This was typically $1000 per lot per month, which was more than $1million annually for a 100-lot residential project.
Simple development applications were supposed to take 120 days to approve but were taking a year in Queensland, compared with about six months for Victoria, developers said.
The Government says it is introducing a priority infrastructure plan, under which developers shoulder much of the cost for infrastrucure work under way.
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