Victoria top state for building and residential hotspots

A new report reveals Victoria is still the leading state for building and residential hotspots in Australia, with nine of the top 20 fastest-growing cities.

A report by the Housing Industry Association, titled HIA–JELD-WENPopulation and Residential Building Hotspots, provides a snapshot of Australia’s fastest growing metropolitan and regional areas in the 2009-10 financial year.

A “hotspot” is defined as a local area where population growth exceeds the national rate and the value of residential building work approved is in excess of $100 million.

According to the report, Victoria registered nine of the top 20 national hotspots in 2009-10, while Queensland had five, WA had four and NSW had two.

Victoria’s Whittlesea North was Australia’s top building and population hotspot, with more than $660 million worth of residential building work approved and a population growth rate of 21.8%.

In second place was Wyndham South in Victoria, where the value of residential building work approved hit almost $478 million and the population growth rate was 16.2%.

Rounding out the top five were Pimpama-Coomera and Griffin-Mango Hill, both in Queensland, and Cardinia-Pakenham in Victoria.

HIA chief economist Dr Harley Dale says Victoria was the standout state due to a temporary boost to population growth in recent years, driven primarily by high net overseas migration.

“Relatively affordable new housing was also a significant contributor to Victoria dominating the top 20 national hotspot list,” Dale says.

Dale says Queensland, which had five cities in the top 20 list, was boosted by the lag impact of the stimulus measures and people moving from interstate.

He says while the list is dominated by outer suburbs – where new housing developments are more common – it also captures renovation work which requires council approval, with Canada Bay in NSW one example of a more established suburb showing a lot of activity.

According to Dale, the 2009-10 financial year saw all states and territories perform well – with regard to residential building activity – due to stimulus in the form of record low interest rates and a tripling of the first home owner grant for new dwellings.

“Unfortunately, with the evaporation of this stimulus came a swift and decisive slowdown – off the back of the hurried return of mortgage lending rates to above-average levels and slow progress in reducing supply side obstacles,” Dale says.

“On the upside, with softer housing conditions and less pressure on trades, now is a good time for people to contemplate building or renovating a home.”

Franchising expert Jason Gehrke recently told StartupSmart that any business involved in asset management and enhancement, such as home improvement, is benefitting from cost-conscious consumers.

“Consumers are beginning to reconsider buying or upgrading their cars or homes as a result of financing or affordability issues, and are deciding instead to renovate or improve what they already have,” he says.