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THE decision today by the Queensland Government to extend its Building Boost by three months will give it a chance to meet its objective of kick-starting the state’s ailing building industry, says the Housing Institute of Australia (HIA).
While only 3206 applications were made across the state, with 225 of those on the Gold Coast, steadily increasing housing approval figures and the probability of further interest rate cuts has led to expectations of an uptake in interest in the program and industry.
Queensland Treasurer Andrew Fraser says strong lobbying from the industry encouraged him to extend the program to April 30. Industry bodies including HIA, Master Builders Association, Real Estate Institute of Queensland (REIQ) and the Urban Development Institute of Australia applauded the move.
HIA general counsel Glenn Simpson, says the government’s objectives for the Building Boost have not fully been achieved.
“It hasn’t been a failure, but it hasn’t lived up to the government’s initial hopes, because very few people have taken it up,” he says.
“A premature end to the program would have meant its overall objectives would not have been met.
“The decision to extend the boost for three months will give it the opportunity to help build a strong housing industry, and a strong jobs market and encourage investment throughout Queensland.”
Master Builders executive director, Graham Cuthbert says the encouraging signs in the industry need to be taken in context.
“Building approvals for November 2011 released this week revealed total dwelling unit approvals in Queensland rose by 6.6 per cent and private sector housing approvals by 10.8 per cent,” says Cuthbert.
"However, we must remember that despite this increase, levels remain extremely low, down almost 24 per cent from November 2010 and down 50 per cent from November 2007.
"We believe the building boost has played a role in the slowly increasing activity levels and, given the current stable economic conditions and two consecutive interest rate cuts, we called on the government to extend the building boost to ensure a sustained recovery for the housing sector.”
REIQ says the announcement is a welcome piece of good news for the real estate industry as the property market transitions from a very tough 2011 into a market characterised by increasing buyer enquiry, sales activity and confidence levels.
“Any initiative which helps the Queensland property market is always welcomed and the extension of the boost until 30 April will likely assist hundreds of extra buyers into a new home,” says REIQ chief executive Anton Kardash.
“However, while our property market is starting to show signs of recovery, the removal of the principal place of residence concession on stamp duty last year continues to act as a deterrent to many buyers of both established and new homes.”
The Treasurer says the recent application numbers show the boost is gaining traction with potential buyers.
"Official interest rates have been lowered in recent months, and with the possibility of even more cuts, this $10,000 grant for buying or building a new home means it's never been more attractive to sign on the dotted line and support the state's housing industry,” he says.
"An end date of April 30 will give developers and builders and extra three months to market the Boost and give the housing industry the kick-start it needs."
Fraser says the Treasury considered that the initial budget allocation of $140 million would cater for the time extension.
"So far we've seen over 3700 applications for the Building Boost. There is obviously room within the budget allocation to accommodate the uptake in interest we expect over the next three months,” he says.
"Every housing stimulus package always has a large increase in interest at the back end of the time period, with many applications coming in after the end date."
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