Queensland building grant to boost construction after government-induced downturn: Westpac

Building approval figures are expected to rebound in Queensland over the next six months following the introduction of the government's building grant, according to Westpac senior economist Matthew Hassan. 

A $10,000 grant has applied from August 1, 2011 and will run until January 31, 2012 for those buying or building a new home in the state. 

The impact of state government interventions on approvals has already been documented in previous ABS figures. 

Following Queensland Treasurer Andrew Fraser unveiling the $10,000 new home building boost grant on June 14, Queensland promptly led a national fall in dwelling approvals in June, with an 18.6% fall compared with May.

ABS figures for July revealed a 14.5% decline in private sector house approvals, a result Hassan called “alarming and puzzling”. 

“Given the extremely low absolute levels this resulted in and the backdrop of an expected recovery from severe weather events and associated rebuilding activity, the weakness was hard to explain,” Hassan says. 

“It has since been brought to our attention that state government policy initiatives may be partly behind the July drop. 

“Clearly those contemplating building in July would have had a significant incentive to delay their decision until August. 

“Accordingly, a significant rebound is likely to come through in August.”

Hassan says such incentives tend to impact more heavily on private sector houses than on private sector unit approvals.