NIMBYism (not in my backyard) and "save our suburbs" campaigns by local residents and councils are one of a number of factors that will inhibit a strong residential building recovery despite rising pent-up demand for new housing, according to Paul Braddick, head of property research at ANZ.
In his latest update, Braddick lists the difficulty in obtaining dwelling construction approval due to both red and green tape (environmental concerns) as a key factor that will result in a subdued recovery, rather than a stronger one.
The other factors that will impinge on the recovery, he says, are soft house price expectations, rising building costs, a squeeze on developer profit margins, substantial infrastructure charges and developer contributions, problems with land availability, affordability and accessibility, insufficient infrastructure (especially transport) and tight credit conditions.
According to Braddick, there is strong pent-up demand for new housing with many conditions favouring a solid recovery including falling interest rates, improved market sentiment and house prices appearing to have bottomed out in most capital cities.
Braddick says total dwelling approvals have risen by almost 12% in trend terms since their low point in January this year, but says the upswing has been almost exclusively driven by a one-third jump in apartment approvals, while detached house approvals remain "near cyclical lows equal to the lows of the past 30 years, excluding the post-GST introduction".
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