Illawarra housing construction slump

Russell Hayes, with his son Dean Hayes, said he hasn't worked on a new house in three years. Picture: KIRK GILMOUR
Russell Hayes, with his son Dean Hayes, said he hasn't worked on a new house in three years. Picture: KIRK GILMOUR

Russell Hayes knows from first-hand experience that the number of new houses being built in the Illawarra is falling - and has been for some time.

The Farmborough Heights builder of 20 years' experience is keeping busy with renovations but he said it has been a few years since he worked on a new house.

"I've done extensions, commercial and warehouses, but the last new house I built was finished in '09," Mr Hayes said.

As far as building houses in the Illawarra, Mr Hayes said there was a lot of competition for only a little work.

"I think it's pretty hard at the moment," he said.

"You've got your project builders and you can never compete with them. It's pretty minimal at this stage; for the amount of builders in this place these days, there's not enough work to go around. It's slim pickings.

"I've got a fair bit of work on now, but it's nothing big. But from what I'm hearing there are a lot of guys out there who are struggling, who don't have much in front of them.

"It's not just builders, it also comes back to the tradesmen - carpenters, plumbers, tilers. If the builders haven't got it, then the subbies haven't got it."

According to Illawarra Regional Information Service (IRIS), the number of dwelling approvals in the Illawarra dropped 41.7 per cent in the year to March 2012.

The Wollongong area reported the biggest drop in approvals - down 66.3 per cent - but Shellharbour and Kiama were also down.

IRIS executive director Simon Pomfret said housing approval rates had been on a downward trend for some time.

"Certainly for the last three or four years building activity has been at historically low levels," he said. "The number of houses approved for development is decreasing."

Mr Pomfret said reasons for the slump included the affordability of construction, available land, and taxes and charges placed on new homes.

The Urban Development Institute of Australia's Southern chapter chairman Glenn Colquhoun agreed that state and local charges were putting new homes beyond the reach of many people.

"New land supply and new housing is particularly hit hard with government charges, taxes and contributions that add to the cost of a new home," he said.

"So the affordability is significantly reduced. Look at West Dapto as an instance; factored into the acquisition of a block of land in West Dapto, you're talking about $30,000 in section 94 contributions, $6000-8000 in state infrastructure contributions, and then you've got your GST added on the price of both the land and the built-form and then the stamp duty on the purchase of the land. 

''It's become more and more unaffordable to build new homes."


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