Hunter Autumn Snapshot
Hunter Autumn Snapshot
Some headlines from the recent HIA Industry Outlook for the Hunter, with opening statements by Chief Executive for Industry & Policy, Simon Croft, & Economic Outlook presented by economist, Maurice Tapang.
Simon raised some extremely interesting, yet rather disturbing and repetitive observations regarding the roadblocks in delivering a new home in 2025.
Let's start with some good news. The "50% of the cost of a brand new home is made up of fees, charges, levies and taxes" has now dropped to just 49%.......
Now for the bad news:
There is effectively zero chance of meeting the 1.2 million homes target. We only built 170,000 homes last year and NSW will be at best 116,000 homes short. To hit the target we need to be building a new home every 2.5 minutes....
The "sterilisation" of land was a term used to highlight the overexertion of planning powers from zoning, bushfire & flood mapping, environment & ecology, heritage & Aboriginal land authorities, .... the list goes on, to the point where much of the land in NSW is now not suitable for housing.
Then we have the expansion of the "Tapes" in construction, with the shifting of risk causing the implementation of policy to be more important than the practical application of new laws. It has monumentally shifted from practical to theoretical.
Red Tape - Planning & approvals.
Green Tape - Environmental initiatives and sustainability.
White Tape - Compliance and codes of practice.
Although there is a pause on implementing the National Construction Code, the NCC 2025 has further expanded to include even more requirements that will add to the cost of delivering a new home. To give you an idea of what construction companies have to deal with - the number of pages in all NCC policy documentation across all sections is now over 64,000! Of which, 3000 pages directly relate to building a new home. The Federal government's recent commitment to cutting red tape is welcome - but have we heard this before?
Regarding just how we are going to get the homes built, we are 83,000 tradies short across the top 12 trades. (Brickies, Chippies, Sparkies, Plasterers, Roofers...). The HIA wanted to highlight the education system in Australia still focuses far too greatly on pushing students through through universities as the measure of success, rather than promoting trade careers. And we are now paying the price for that.
From the Federal Budget, there were no new announcements to get buyers building new homes, only to expand the Help to Buy scheme, first launched late last year. It was intended to support Australians with lower deposits and smaller mortgages to buy a home, with $800m spent lifting the property price and income caps on the scheme, in which the government will contribute equity of up to 40 per cent to support eligible homebuyers. It is still only available to 10,000 applicants.
Those who are eligible for the scheme will need to earn less than the increased annual income caps set by the government, which are now $100,000 for single applicants and $160,000 for joint candidates.
Sydney and other New South Wales-based regional centres will be afforded the highest price cap at $1.3 million. The limit is set at $1 million in Brisbane and Canberra, $950,000 in Melbourne, $900,000 in Adelaide, $850,000 in Perth, $700,000 in Hobart and $600,000 in Darwin.
The Albanese government will also spend $54m to help accelerate the uptake of modern methods of construction, namely prefabricated and modular homes, which it says are 50 per cent quicker to build than traditional homes. It is worth noting this type of construction currently only makes up around 3 to 4 percent of new homes.
And... the Federal government has committed to banning foreign purchases of existing dwellings - including temporary residents and foreign-owned companies - for two years from April 1.
In local news, the Hunter region is predicted to experience a population increase to 950,000 by 2040. Although there are more people in the average home, 10,000 per year demonstrates solid future demand for new housing.
Now : median land prices:
Newcastle / Lake Macquarie - $505,250
Hunter Valley ecl. Newcastle - $354,000
If I can assist further with additional commentary, please be in touch. Hopefully there's two new homes finished by the time you're reading this bit...
