Home Buyers Miss Out On Large Slice Of Grants Pie

Sydney Morning Herald

Friday January 16, 2009

Wendy Frew Urban Affairs Editor

HOME BUYERS in NSW have missed out on millions of dollars of funding after the lion's share of $112 million in Commonwealth housing affordability grants was awarded to smaller states.

The Federal Government on Wednesday announced it had short-listed 33 projects in the first round of its Housing Affordability Fund, with $36 million, or 32 per cent, going to housing projects in Western Australia, and 23 per cent to Queensland.

NSW, which has some of the least affordable housing and greatest mortgage stress in Australia, was awarded $16 million, or 14 per cent.

Funding applications, which were made by state agencies or developers in conjunction with councils, were judged on merit, not geography.

However, money allocated to NSW fell short of what was needed, said Nick Duncan, the chief executive of the Urban Development Institute of Australia NSW.

"We probably have the lowest housing delivery at the moment [of all the states], so we need all the stimulus we can get,"he said.

"These are great initiatives but the fact is NSW needs it more than anywhere else, so it falls short of the mark . . . we need to discover why we have not got a bigger slice of the pie."

The NSW Housing Minister, David Borger, welcomed the funding, which follows the State Government's decision last month to pick up more of the infrastructure costs for new houses.

"I absolutely welcome the Federal Government's moves to make houses more affordable, and encourage developers to get on board so NSW can have the full benefit of the program," Mr Borger said.

A Landcom housing project at Edmondson Park in Sydney's south-west was one of the projects to make the shortlist.

Landcom's general manager for development, Michael Burt, said the developer expected to offer an average rebate of about $22,000 per lot for 88 lots.

Mr Burt said the money would be used to build roads, and drainage and sewer pipes that would benefit hundreds of other smaller landowners in the new suburb.

Official home loan figures for November, released on Wednesday, showed a tentative recovery in the national housing market, following rate cuts and the Federal Government's decision to double the first-home buyers' grant on established houses and triple it on new houses.

But there is concern that the recovery could quickly stall following unemployment data released yesterday, which shows a drop in full-time positions and a rise in the jobless rate.

The economy lost 44,000 full-time jobs last month and the unemployment rate rose to 4.5 per cent from 4.4 per cent in November.

The latest Australian Bureau of Statistics data shows NSW recorded its worst quarter on record for the commencement of new houses. Only 6112 were started in the September quarter, down 25 per cent from the same quarter a year earlier.

There was a 20 per cent fall in Queensland and a 6 per cent rise in Victoria over the same period.

NSW residents are also spending more of their household income repaying home loans - 34 per cent in NSW compared with an average of 30 per cent in other states, bureau data shows.

© 2009 Sydney Morning Herald

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