Building delays hamper recovery
Executive Director of Master Builders, John Miller standing outside apartments being built in Kingston. Photo: Melissa Adams
Tentative signs of a recovery in the home building sector in the ACT have been tempered by complaints that builders cannot start work on new blocks of land for up to two years.
Matthew Smith, who builds about 60 to 70 homes in Canberra a year, said most of his work came from people who had purchased land.
''If I go and try and buy a block of land from the Land Development Agency, I can't walk in there and buy one.
''Over-the-counter blocks are hand-me-back blocks. [Buyers] got them in the ballot and handed them back because they are too steep [to build on].''
Mr Smith said a ballot last year at the new Gungahlin suburb of Jacka for 95 blocks had attracted 700 prospective buyers.
Raw blocks of land were available but the delay was in services such as electricity and water.
Mr Smith said builders were going broke Australia-wide, but in the territory he could see no reason why they should struggle through a lack of suitable serviced building blocks.
He said the territory's land releases favoured major companies over smaller operators such as himself.
Master Builders Association ACT executive director John Miller said the government had acknowledged more work was needed to overcome the problem.
''As we know, there has been quite a number of sales over the last few years,'' Mr Miller said.
''Still, there are timing issues, about how long it takes for that ability to actually start and get on with a job.
''There is recognition by the government themselves there is still more work to be done there. It may be a little while before that is fully addressed.''
Meanwhile, Mr Miller said Bureau of Statistics building approvals data for November showed a firming in consumer sentiment had accompanied the two most recent interest rate cuts, even though the cuts had not been fully passed on by the banks.
The figures showed a national increase of 2.9 per cent in seasonally adjusted terms.
Mr Miller said the ACT data showed a solid increase - the strongest month for building approvals since September 2011.
"We believe that consumer sentiment remains tentative, but the signs are growing increasingly positive," he said.
The only negative in the data was a fall of 0.3 per cent in approvals for private sector houses.
Mr Miller said the November data represented an indicator for activity levels heading into this year. "On that basis, we are heartened by the level of strength with respect to multi-unit developments."
He said uncertainty over the public service might have caused nervousness among home buyers and investors about jumping into the market. ''Hopefully people are starting to see more encouraging signs out there, that they say this is something we can deal with.''.