Building approvals have continued to decline for more than a year, and one building franchisee believes activity in Tasmania will remain soft.
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The latest Australian Bureau of Statistics data shows building approvals dropped by 468 homes approved to 2399 in the year to 2015-16.
It found building approvals decreased in every state for the month of July besides New South Wales and Victoria, with Tasmania recording the biggest fall of 3.7 per cent.
G.J. Gardner Launceston franchisee Chris Dell said there was an undersupply of high quality and affordable land in the North, as a result of buyers moving quickly on the higher first home buyer grant in 2014.
“We’ve seen a lot of growth in Perth, Longford, Hadspen areas for first home buyers, they were traditionally a lower priced block compared to buying directly in Launceston, but most of those areas don’t have any available subdivisions,” he said.
“A lot people took advantage of the $30,000 (boost)...but it’s still a good stimulus to have, I’d rather much see $20,000 than zero,” he said.
This year’s budget saw the state government restore the first first home builders grant to $20,000.
“We are probably 20 per cent down this year compared to last year just on number of builds per year, but we see that building goes in cycles,” Mr Dell said.
“I think we’re just going to stay steady as we are, I’d hope for growth but I’m not confident in predicting the market will improve greatly in Launceston.”
Tasmania’s lowest month for building approvals in trend terms was June, and comparisons between previous releases show this decline may have continued for close to a year-and-a-half.
In August, Tasmania’s Master Builders Association Tasmania executive director Michael Kerschbaum said the drop in building approvals was largely due to a rush when the first home builder’s grant was at its highest in 2014.
“So many people took advantage of it at the $30,000 (during 2014-15) that we think the take-up in the market has almost saturated,” he said.
The industry has praised legislation, which passed the parliament this month, that will negate the need for building permits for numerous projects, up to and including two-storey houses.
Minister for Building and Construction Guy Barnett said the state government was committed to reducing costs and delays that had potential to stifle development.
