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New home building declines: ABS
Released 28 February 2011

New residential building work done fell by 1.7% in the December 2010 quarter, following the 5.2% decline in the September 2010 quarter, according to figures from the Australian Bureau of Statistics.   

While on a more positive note, work done on major alterations and additions is again growing, turning in a 2.5% increase for the December 2010 quarter to be up by 6.3% over 2010.

HIA Senior Economist Andrew Harvey said renovations continue to be popular as Australians increasingly look to improve their existing homes rather than face the mounting transaction costs, such as stamp duties, that they will incur if they trade-up to another property.

“Unfortunately Australia’s high property transactions costs do not help the problem of Australia’s undersupply of housing, nor the affordability problems faced by both prospective home owners and those in the market for rental property."

Harvey said the state governments need turn their attention to removing stamp duties on new homes so as to better encourage annual levels of new home building that will help ease the pressure on prospective home owners, particularly young Australians who are really struggling to enter the housing market.

In the December 2010 quarter, seasonally adjusted new residential work done fell by 3.5% in NSW, 6.7% in Queensland, 5.1% in Tasmania and 10.3% in the ACT.

New residential work done rose by 3.3% in Victoria, 0.9% in South Australia and 0.2% in Western Australia.