UDIA PLAN TO BOOST COAST CONSTRUCTION

Written on the 26 June 2012

UDIA PLAN TO BOOST COAST CONSTRUCTION

INFRASTRUCTURE charges should be put on hold for up to a year to jump start the Gold Coast’s struggling construction industry, says Urban Development Institute of Australia (Gold Coast-Logan) president Stephen Harrison (pictured).

The UDIA quarterly report shows the city’s construction industry has started to turn around but predicts it will be a slow road to recovery.

Harrison says recent changes in government at the local and state level were the single biggest factor driving the turnaround.
But he says further initiatives are needed from the Gold Coast City Council (GCCC).

“The State government and GCCC are working in conjunction on issues in the development and construction industry and we haven’t had that for years. In the past they worked against each other,” says Harrison.

“There are policy changes afloat over the next six to 12 months on the Gold Coast, but we are still lagging two to three years behind, and are less competitive, than some other councils such as Logan and Ipswich.

“I would like to see the council put infrastructure charges on hold for six to 12 months, for projects that are ready to go. That will get projects moving again.”

UDIA director of policy and economic research Duncan Maclaine presented the report at the Minter Ellison Varsity Lakes offices this morning.

Maclaine says there are some promising signs in the report although affordability continues to be a problem on the Gold Coast despite a trend towards smaller blocks.

“The Gold Coast has turned around, so has the rest of the state. We saw that occur late last year and early this year but it has plateaued since,” he says.

“The Gold Coast’s recovery will probably be slower than other parts of Queensland simply because, before the downturn, activity was so great and the Gold Coast was oversupplied.

“It will take the Gold Coast longer to come out of its downturn than other places, but the worst has passed.

“That is the message pretty much everywhere in Queensland. Approvals, production, sales will start to turn up, but it will be a very gradual process.”

The report shows the number of lots produced on the Gold Coast fell 0.7 per cent in the year to December, while state-wide the drop was 15.3 per cent.

Just 1030 lots were produced on the Gold Coast, the second-worst calendar result on record and less than half the level immediately before the Global Financial Crisis hit in 2008.

Detached housing approvals rose in the three months to April, when 339 were approved, up from 293 recorded in the three months to January. Approvals have been stable for 18 months, but remain at 55 per cent of the five-year annual average.

Maclaine puts the staggering 201 per cent increase in median Gold Coast land prices over the last decade down to hikes in government charges and supply constraints.

The city’s median lot size shrunk from 614sqm to 527sqm in response to the crisis in affordability, but the price per square metre still grew, despite weak conditions.

Quoting from census statistics, Maclaine says houses owned outright in Queensland fell “alarmingly” to 29 per cent, while the figure is just 23.6 per cent on the Gold Coast.

The number of households under rental stress in Queensland rose to 10.4 per cent, compared to 9.3 per cent across the country.

“If land prices aren’t falling now, under the current policy and economic conditions, you have to ask yourself, ‘when will they fall?’ ”


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