Positive Queensland – Confidence Coming Back

Positive Queensland – Confidence Coming Back

UDIA Queensland – Development and Construction Industry Performance Report

Early 2013 has been a turning point for confidence. Since the beginning of the year median house prices and share prices have risen, Queensland trend unemployment has fallen, and retail spending has exceeded expectations.

 It seems Queenslanders are realising that our economy and that of our trading partners are in reasonable shape and ongoing pessimism is unjustified.

The RBA is detecting this shift with the Deputy Governor in a speech this week stating that “despite what one often hears, households do appear to be feeling better about both their finances as well as Australia’s medium-term prospects”.

Whilst there are good reasons to be optimistic for 2013, official property data released since the last report remains, on balance, disappointing. Private sector dwelling approvals were relatively stable in the three months to Jan-13 – down 0.1% (seasonally adjusted). Owner Occupier lending for the construction or purchase of a new home fell 7.3% in the Jan-13 quarter. In contrast, lending to investors for new housing was stable. Nationally, dwelling approvals were up 0.7% in the three months to Jan-13 with New South Wales the only state reporting a significant increase (up 12.9%).

In the full year to January 2013, Queensland private sector dwelling approvals and owner-occupier new home lending grew 2.5% and 12.9% respectively.

Production of vacant lots continues to tract at historically low levels with just 2,569 lots registered in the September quarter (down from 2,773 in Jun-12). Annual lot production to September 2012 was 11,150 – the lowest annual total on record. Preliminary data and feedback from developers suggests, however, that sales activity improved in late 2012 and early 2013.

Increased dwelling commencement activity since early 2012 is now making a positive contribution to State economic growth and improved employment levels, with Queensland construction employment rising for the third consecutive quarter – up to 13,310 (or 50.6%) to 251,674 in Feb-13.

Rising confidence and reasonable economic fundamentals point to increased industry activity over the remainder of 2013. Demand for new housing will be supported by a return to house price growth, low interest rates, good rental yields and improved affordability for first home buyers. This is very positive for our industry.

Source: UDIA Queensland Development & Constructin Industry Performance Report – March 2013

 

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