Grant helped big players get bigger

Australia’s largest builders have grabbed a bigger share of the new home market, thanks in large part to the first home owners grant.

But the increased market share did not save builders from seeing a 6.5 per cent slide in new home starts over the last financial year, according to the Housing Industry Association’s (HIA) Housing 100 report.

However the report also said that the decline in housing starts was less severe for the nation’s largest builders than for the broader building sector, where starts dropped 17 per cent.

HIA’s chief economist Dr Harley Dale said that the tripling of the FHOG to $21,000 favoured larger builders and prevented a more significant fall in overall starts.

“The boost to the grant helped the Housing 100 increase their share of detached house starts to a record 44 per cent, up from 39 per cent in 2007/08. We expect the share will reach a fresh high in 2009/10,” Mr Dale said.

“The market share for the largest builders increased in 2008/09 in New South Wales, Victoria, Queensland, and Western Australia with the share in WA exceeding 70 per cent.

We did, nevertheless, witness a drop in Housing 100 starts in 2008/09 and the emerging recovery in 2009/10 is being constrained by bottlenecks in the approvals process.”

Australia’s largest builders have grabbed a bigger share of the new home market, thanks in large part to the first home owners grant.

But the increased market share did not save builders from seeing a 6.5 per cent slide in new home starts over the last financial year, according to the Housing Industry Association’s (HIA) Housing 100 report.

However the report also said that the decline in housing starts was less severe for the nation’s largest builders than for the broader building sector, where starts dropped 17 per cent.

HIA’s chief economist Dr Harley Dale said that the tripling of the FHOG to $21,000 favoured larger builders and prevented a more significant fall in overall starts.

“The boost to the grant helped the Housing 100 increase their share of detached house starts to a record 44 per cent, up from 39 per cent in 2007/08. We expect the share will reach a fresh high in 2009/10,” Mr Dale said.

“The market share for the largest builders increased in 2008/09 in New South Wales, Victoria, Queensland, and Western Australia with the share in WA exceeding 70 per cent.

We did, nevertheless, witness a drop in Housing 100 starts in 2008/09 and the emerging recovery in 2009/10 is being constrained by bottlenecks in the approvals process.”

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