Housing industry says building cheaper

DESPITE the rising costs associated with building a new home, it is still cheaper to build than to buy, according to the Housing Industry Association. HIA’s Nick Proud said that $150,000 could finance the construction of a standard three-bedroom home.

This, paired with the cost of a housing block, in Launceston starting from $70,000, meant that building a new home could cost as little as $220,000 – lower than the average Northern Tasmania house price at $258,000.

The HIA Tasmania State Outlook, published in June 2007, revealed that the majority of houses approved for building in the March 2007 quarter for Northern Tasmania, were priced at between $200,000 and $500,000, figures that do not include the price of land.

For the 2007 March quarter, 148 houses were approved, priced at between $200,000 and $500,000. In contrast, only 18 houses were approved priced at between $150,000 and $160,000.

While building a new house for as little as $150,000 was conceivable, the instances of its occurrence were few.

Mr Proud was concerned that the affordability of building a new house was being compromised by a shortage of infrastructure services.

“Land’s not an issue but being close to infrastructure is,” he said.

Within a 10-minute radius of Launceston there was ample land for building opportunities, but the necessary services were not there, meaning significant costs to connect to water, sewerage and power, Mr Proud said.

Several key initiatives for housing affordability were promised before the federal election and Mr Proud was confident that they would be rolled out within the next year, providing much-needed solutions.

Key points of this Federal Housing Affordability strategy included reforms to superannuation to allow First Home Saver Accounts to encourage would-be buyers to save a larger deposit for a home. It included plans to invest in residential infrastructure with funding being made available to local government to cover part of the cost for new residential developments.

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