great news for property investors

http://www.townsvillebulletin.com.au/article/2009/01/31/36171_print.html

***This scenario could actually happen to most Capital cities which means property can only go up***

Townsville housing approvals plummet

LENDL RYAN

January 31st, 2009

TOWNSVILLE City Council says we are two years away from a housing affordability crisis the likes of which the city has never seen.

The number of houses approved dropped by more than $94.9 million to $325,317,800 in 2008 with 490 less dwellings given the tick than the year before.

The number of new units approved slumped by $14.5 million to $198,282,613 with 90 less units receiving the green light. The council's Planning and Economic Development Committee chairman David Crisafulli warned house prices would rocket if the worrying decline in approvals continued.

"I fear that unless confidence by the banks returns, which will free up investment for builders, developers and mums and dads, we are two years away from an affordable housing crisis the likes of which this region has never seen," he said.

"There is no doubt that people are already struggling to afford a home at the moment but I fear the crisis is going to get much worse.

"We under-supplied in 2007 and that means that we drastically under-supplied in 2008.

"It is simply a case of supply and demand.

"The banks have lost confidence, we are building fewer homes and we still have people moving to the city.

"The costs of homes will increase drastically once we get over this hump because we have ceased to build enough dwellings to meet our demand."

Cr Crisafulli said the drop in building approvals, however, was good news for investors.

"On a positive note there is a message out there for an investor or someone looking for a first home or a developer from down south," he said.

"If we have a massive supply issue it makes this city probably the best place in Australia to invest and anyone considering making an investment will not go wrong in Townsville in the current market – so now is the time to buy."

The commercial sector was the only area to experience an increase in the number of council building approvals.

Three-hundred and sixty-four approvals valued at $299,983,810 were granted compared to 319 approvals valued at $229,827,792 in 2007.

"There is no doubt that the diversification of our industry and business makes us one of the strongest markets in the country," Cr Crisafulli said.

The economic downturn has clearly hit residents hard with the numbers of pools and spas, often one of strongest categories for approvals, declining by $3.3 million.

Six-hundred and twenty-two approvals valued at $16,428,513 were rubber-stamped compared to 775 valued at $19,719,506.

Renovations dropped marginally by $564,000 with 2483 approvals valued at $52,930,358 granted compared to 2655 approvals valued at $53,494,229.