Monday, July 8, 2013

Cairns Post backs higher land prices?

Last Friday the Cairns Post published a report by Daniel Strudwick: Building industries high hopes despite approvals falling.

FAR Northern councils have approved fewer new homes in the past financial year than they did a year earlier but builders and construction industry experts are confident of a turnaround.
Data from the Australian Bureau of Statistics released yesterday shows 602 new homes with a combined value of $163 million were approved in the 11 months up to May, in an area from Tully to the Daintree and west to Herberton.
That figure is down from 720 approvals worth a combined $189 million for the same period in 2011-12.

I haven't checked the detail on period comparisons but this appears to be a mostly balanced and accurate report based on annual data rather than monthly fluctuations. Today, business editor Nick Dalton returned to his typical Cairns Post format with a somewhat hyperbolic report suggesting an imminent land crisis in Cairns: Growth squeeze on land in Cairns.

CAIRNS risks running out of land to build new homes as the latest figures show increasing growth in housing approvals.
The Australian Bureau of Statistics shows a 20 per cent boost in May from 65 in April to 78.
May was indeed an improvement on the previous month albeit the numbers here while representative do no appear to be precisely accurate. Dalton also reports supporting comment from the Master Builders and UDIA although timeframes for the looming shortage are unspecified?

The Qld Government Statistician recently also updated their excellent Residential land development activity profiles up to December 2012 quarter. What does this show you may ask?

What it shows is that there is a stock of 5,896 approved but uncompleted residential lots in Cairns. 1,824 of these lots, or 31%, had progressed to the stage of operational works approval at December 31, 2012.

That is for Cairns LGA and given a 'boom' in building approvals to 60 in a month for the same area it hardly appears to flag an imminent land shortage? The numbers also compare more than favourably with other regional centres such as Townsville with higher building approvals currently. Cairns would appear if anything to currently sustain an oversupply of approved available land?

Substantial receiver land stocks which had been tied up were cleared in 2012, particularly the CEC holdings on the south side. Any land shortages would raise serious questions re land banking supply constraints. Is there is a subtextual agenda in this report? Is the Cairns Post really going into bat for higher land prices for developers or Council concessions?

Commentary also at Conus Blog who was recently also unimpressed by a dalton on house prices: House price rise in Cairns.

Meanwhile I am open to suggestions on a definition of a new verb specific to Cairns: "to dalton"?

Snarky P.S: There is also a dalton on the Metusik numbers in the Post report which refers to ALL property sales and not just land as indicated by Dalton :-P

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