Victoria, Queensland dominate building hotspots, but nation-wide slowdown tipped

Victoria and Queensland were home to the fastest-growing cities in the 2010 financial year, as low interest rates and Government stimulus pushed up the value of new building and major renovation work by 30%, but the Housing Industry Association is less upbeat.

HIA chief economist Harley Dale says for the year to June 30, 2010, the value of residential building activity reached $5.65 billion, almost one-third higher than the previous year’s figure of $4.33 billion.

For this fiscal year, HIA is hoping for something between the two figures, but says it’s possible it could fall to between $4 and $4.5 billion.

“New home building starts peaked in June last year, so clearly the new financial year will be weaker, but it’s a matter of how much,” Dale told SmartCompany.

He describes the 2010 financial year as a “healthy” one for housing, but suspects the 2011 financial year will be affected by on-going issues with access to credit and economic uncertainty holding back new projects.

The HIA–JELD-WEN Population and Residential Building Hotspots report, published annually, defines ‘hotspot’ as a local area where population growth exceeds the national rate (1.7% in the year to June 2010), and where the value of the residential building work approved is more than $100 million.

Dale says that Victoria, which had nine of the top 20 fastest-growing cities, benefited from high net overseas migration and relatively affordable new housing over the year.

For the 2010 financial year, one in three new starts were in Victoria. This financial year, Dale expects the State to “come off the boil” but remain at historically strong levels.

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, Dale says.

Dale 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 New South Wales one example of a more established suburb showing a lot of activity.

The fastest-growing city nation-wide was Whittlesea North in Victoria, which recorded population growth of 21.8% and $663 million in approved residential building work.

Victoria’s Wyndham South came in second, with a population growth rate of 16.2% and the value of residential building work approved almost $478 million.

Here are the top 20 national building and population hotspots: