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Vol 11. No.79

Economic Overview

	Current	+/-	Movement
$AUS/$US	92.47	+0.54
Cash Rate	4.25	Steady
90 Day Bill	4.56	+0.02
10 Year Bond	5.785	-0.010
ASX 200	4880.0	-1.5

NSW Property

Sydney’s land supply update (AFR Pg.57, SMH Pg.3)

• Yesterday the NSW Government released the 2008/09 Metropolitan Development Program.
• According to the report approximately 125,000 homes are either being planned or constructed in brownfield areas whilst land for 69,000 new homes has been rezoned in greenfield areas within the Sydney Region.
• By 2012-13 housing construction will exceed 27,000 dwellings p.a., up from 18,600 dwellings last year.
• The government has rezoned 68,636 lots for development above the target of 60,000.
• Over the past 2 years greenfield development has been well below the average of 7,000 lots p.a.
• Sydney needs 18,000 new homes a year in existing suburbs and over 800 major development sites have been identified with the potential for 125,295 dwellings.
• However, the cost to build a new home on Sydney’s fringe is approximately $200,000 more than in other capital cities due to government taxes and the cost of raw land. There are also issues surrounding the provision of infrastructure and obtaining DA’s.
• The cost of building “infill” housing is on par with other states.

National Property

National land shortage update (AFR Pg.57)

• According to the National Housing Supply Council by the middle of 2010 the national housing shortage will be 202,400 dwellings based on a “medium projection”.
• In the middle of 2009 the gap was 178,400 dwellings, equivalent to $70 billion of property.
• By 2029 the gap between underlying demand and supply could be 640,600 dwellings.
• Land constraints identified include the time spent moving new land onto the market which varies from 6 to 15 years, the role of planning authorities at all levels of government and the need to integrate planning decisions with the delivery of infrastructure.