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HOUSING AND CONSTRUCTION


FIRST HOME OWNERS GRANT

The First Home Owner Grant (FHOG) was introduced on 1 July 2000 entitling eligible applicants to a one-off payment of $7,000. On 9 March 2001, the Commonwealth Government announced that an additional $7,000 grant would be available to first home owners who entered into contracts between 9 March 2001 and 31 December 2001 (inclusive) to build their first home or purchase a new but previously unoccupied home.

This additional grant was later reduced from $7,000 to $3,000 for contracts made between 1 January 2002 and 30 June 2002 (inclusive) by applicants building a first home or purchasing a new but previously unoccupied home.

From July 2002 onwards, the FHOG stands at the original amount of $7,000.

In the ACT, there have been 14,606 applicants with more than $100m paid since the introduction of the home owners grant.

12.1 FIRST HOME OWNER GRANTS, ACT
	2000-01	2001-02	2002-03	2003-04	2004-05	2005-06(a)
Applicants (no.)	3 118	3 632	2 406	1 565	2 077	1 808
Amount paid ($)	22 218 000	28 056 000	17 579 000	10 603 000	14 012 789	12 180 789
(a) Financial Year to Date as at 31 March 2006.
Source: ACT Department of Treasury, ACT Revenue Office, First Home Owners Grants, Data available on request.

Grants by district

Within the ACT, there was a 33% increase in the total number of FHOG grants from 2003-04 (1,528 grants) to 2004-05 (2,037 grants). The Tuggeranong district had the highest number of first home owner grants during the 2004-05 financial year (594 grants, or 29% of all FHOG grants in the ACT). The next highest districts were Belconnen (578 grants, or 28%) and Gungahlin (316 grants, or 16%).

12.2 FIRST HOME OWNER GRANTS BY DISTRICT, ACT
	2003-04	2004-05
	no.	no.
Canberra Central	299	315
Rural	-	-
Tuggeranong	367	594
Belconnen	448	578
Woden Valley	103	116
Weston Creek	85	116
Gungahlin	225	316
Jerrabomberra	1	2
Total(a)	1 528	2 037
- nil or rounded to zero (including null cells)
(a) Totals may vary to those in Table 12.1 due to the grants in some districts being repaid.
Source: ACT Department of Treasury, ACT Revenue Office, First Home Owners Grants, data available on request.

HOUSE PRICES

The moving annual median house price is an average of quarterly figures for the past year. When a new quarterly figure is obtained, it is added to the figures for the preceding three quarters. The total figure for the last four quarters is divided by four to arrive at the new moving annual median.

According to the Real Estate Institute of Australia (REIA), the moving annual median house price for Canberra in the December quarter 2005 was $359,100 for houses and $292,500 for other dwellings. Canberra had the third highest moving annual median house price of all capital cities behind Sydney ($524,300) and Melbourne ($359,500). Canberra also recorded the third highest moving annual median price for other dwellings behind Sydney ($363,300) and Melbourne ($299,800). Median house prices in Canberra increased by 2% from the December quarter 2004 ($350,900) and by 53% in the three years from the December quarter 2002 ($234,200).

12.3 MOVING ANNUAL MEDIAN HOUSE PRICES(a) - December quarter
	House prices						Other dwelling(b)
	2000	2001	2002	2003	2004	2005	2000	2001	2002	2003	2004	2005
	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000
Canberra	180.8	206.3	234.2	317.5	350.9	359.1	140.3	156.9	197.8	262.9	278.7	292.5
Sydney(c)	309.5	325.3	458.3	533.0	553.0	524.3	252.4	287.8	335.5	367.3	376.3	363.3
Melbourne	249.8	296.8	327.5	367.0	366.0	359.5	191.9	229.7	262.2	288.6	292.0	299.8
Brisbane	149.0	164.3	193.4	258.6	307.8	313.8	171.5	164.1	174.4	201.8	240.6	255.3
Perth	156.7	167.1	187.2	223.7	256.3	303.8	114.3	123.6	147.3	180.5	202.5	241.4
Adelaide	132.6	150.2	177.3	223.3	260.8	275.5	94.6	109.8	134.7	168.8	196.6	207.5
Hobart	117.8	120.6	137.2	192.0	252.0	268.5	88.9	88.5	95.6	148.6	192.1	209.0
Darwin	186.8	188.0	202.3	216.0	256.5	295.7	146.6	149.8	154.8	154.9	176.3	216.1
(a) Moving annual median is an average of the quarterly figures for the past year.
(b) Other dwellings are individual flats, home units, town house, terrace house etc.
(c) New Sydney moving annual median price series adjusted for compositional change.
Source: Real Estate Institute of Australia, Real Estate Market Facts, December Quarter 2005.

House price index

The house price index provides a measure of house price movements over time, rather than prices themselves. The ABS produces two house price indexes, one for established house prices and another for project homes (which represents movements in the cost to construct a new house, excluding the value of the land).

The reference base of an index series is that period for which the value of the index is set to 100.0. For the house price indexes, 1989-90 has previously been used as the reference base. With the introduction of a new methodology for its calculation, the established house price index is now presented on a reference base of 2003-04 = 100.0.

Canberra's house price index for established houses remained fairly constant between 2003-04 (100.0) and 2004-05 (99.9), with a 0.1 index point decrease. There was an increase of 1.2 index points for the weighted average of the eight capital cities over the same period. The house price index for project homes in Canberra increased 2.0 index points between 2003-04 (100.0) and 2004-05 (102.00). This increase was lower than the increase for the weighted average of the eight capital cities (6.1 index points).

12.4 HOUSE PRICE INDEXES(a)
	Established houses(b)		Project homes(c)
	Canberra	Weighted average of eight capital cities	Canberra	Weighted average of eight capital cities
2002-03	82.7	86.6	91.6	93.1
2003-04	100.0	100.0	100.0	100.0
2004-05	99.9	101.2	102.0	106.1
(a) Base of each index: 2003-04 = 100.0.
(b) Price changes relate to changes in the total price of dwelling and land.
(c) Price changes relate only to the price of the dwelling (excluding land).
Source: House Price Indexes, Eight Capital Cities, December quarter 2005 (cat. no. 6416.0).

RENTAL PROPERTIES

According to the REIA, during the December quarter 2005, Canberra had the highest quarterly median weekly rent ($310) for three bedroom houses in Australia, an increase of $10 (3%) from the previous quarter. However, Canberra had the lowest annual increase (3%) from the December quarter 2004. The second lowest was Sydney (4%) and third lowest was Melbourne (5%). For two bedroom other dwellings, Canberra had the second highest quarterly median weekly rent at $290, following Sydney at $300.

12.5 SUMMARY OF MEDIAN WEEKLY RENTS - December quarter 2005
	3 Bedroom houses			2 Bedroom other dwellings(a)
	Quarterly median $/week	Quarterly % change	Annual % change	Quarterly median $/week	Quarterly % change	Annual % change
Canberra	310	3.3	3.3	290	3.6	7.4
Sydney	260	-	4.0	300	3.4	3.4
Melbourne	230	4.5	4.5	220	-	4.8
Brisbane	250	2.0	8.7	230	-	7.0
Adelaide	230	2.2	9.5	175	-	6.1
Perth	230	4.5	21.0	200	5.3	29.0
Hobart	250	8.7	8.7	190	5.6	18.8
Darwin	300	7.1	11.1	220	-	4.8
- nil or rounded to zero (including null cells)
(a) Other dwellings are individual flats, home units, town houses, terrace house etc.
Source: Real Estate Institute of Australia, Real Estate Market Facts, December Quarter 2005.

FINANCE COMMITMENTS

Housing finance commitments are secured loans from significant lenders (banks, building societies etc.) to individuals, where the purpose of the loan is the construction or purchase of owner occupied dwellings.

In trend terms, there were 7,470 housing finance commitments in the ACT and 672,616 nationally in 2005. Over the past seven years, housing finance commitments in the ACT have fluctuated. While the 2005 figure was a 3% increase from 2004 (7,264 commitments), there was an overall decrease of 29% since 1999 (10,556 commitments). Nationally, there was a 27% increase from 1999 to 2005.

12.6 HOUSING FINANCE COMMITMENTS(a)(b): Trend series
	1999	2000	2001	2002	2003	2004	2005
	no.	no.	no.	no.	no.	no.	no.
ACT	10 556	9 649	8 974	9 767	9 847	7 264	7 470
Australia	531 032	523 339	607 005	625 353	676 631	615 784	672 616
(a) Excludes alterations and additions. Includes refinancing.
(b) The number and value of owner occupied housing commitments for the construction of dwellings has been revised downward in all states and territories back to November 1995, mainly due to the incorrect inclusion of finance commitments for the purchase of individual residential blocks of land.
Source: Housing Finance, Australia, March 2006, cat. no. 5609.0, Time Series Spreadsheets.

HOUSING AFFORDABILITY

The housing affordability index is a measure of household disposable income as a ratio of income required to meet payments on a typical dwelling. A higher index number represents more affordable housing.

According to the Housing Industry Association, housing affordability in the ACT rose by 9.3 index points between the September quarter 2005 (93.9) and the December quarter 2005 (103.2). Nationally, the affordability index rose by 5.6 index points over the same period from 102.8 to 108.4. In the year to December 2005, housing affordability in the ACT rose by 13.4 index points, contrasted with the national increase of 2.8 index points over the same period.

12.7 HOUSING AFFORDABILITY INDEX, ACT

Nationally, 161,278 dwelling units were approved in 2004-05 which was a 12% decrease from 2003-04 (182,362 dwelling units).

Dwelling units commenced

In 2004-05, 2,458 dwelling units commenced in the ACT. This was a 15% decrease from 2003-04 (2,896 dwelling units). Of the dwelling units commenced in 2004-05, 955 (39%) were new houses, with a total value of $230.0m.

Nationally, 156,742 dwelling units commenced in 2004-05. This was a 9% decrease from 2003-04 (171,791 dwelling units). Of the dwelling units commenced in 2004-05, 104,537 (67%) were new houses which had a total value of $20,880.9m.

12.8 DWELLING UNITS COMMENCED, ACT: Original series

Nationally, 159,561 dwelling units were completed in 2004-05. This was a 2% increase from the previous financial year (157,183 dwelling units). New houses made up 65% (104,453) of dwelling units completed in 2004-05 and had a total value of $20,936.8m.

ENGINEERING CONSTRUCTION

The value of engineering work done in the ACT for 2004-05 was $247.3m. Telecommunications made up 32% ($78.3m) of the value of work done, followed by Roads, highways and subdivisions which made up (26%, or $63.5m).

The largest increase in the value of work done between 2003-04 and 2004-05 was recorded in Bridges, railways and harbours, up $1.1m (275%). The largest decrease over the same period was in Heavy industry (down $0.3m, or 60%). This was followed by Roads, highways and subdivisions (down $21.5m, or 25%), and Recreation, and other (down $1.4m, or 7%).

12.9 VALUE OF WORK, ACT
		Roads, highways and subdivisions	Bridges, railways and harbours	Electricity generation, transmission etc. and pipelines	Water storage and supply, sewerage and drainage	Telecomm- unications	Heavy industry	Recreation and other	Total
		$m	$m	$m	$m	$m	$m	$m	$m
Work commenced
	2002-03	63.9	2.3	32.2	22.0	48.2	0.3	54.7	223.5
	2003-04	96.9	0.3	28.9	59.1	62.0	0.8	19.3	267.4
	2004-05	56.3	3.5	40.7	37.8	77.9	0.2	18.4	234.8
Work done
	2002-03	71.6	2.3	41.9	21.8	51.2	0.2	55.8	244.7
	2003-04	85.0	0.4	29.0	48.9	62.4	0.5	18.7	244.9
	2004-05	63.5	1.5	38.8	47.7	78.3	0.2	17.3	247.3
Source: Engineering Construction Activity, Australia, December 2005, (cat. no. 8762.0).

BIBLIOGRAPHY


ABS

Building Activity, Australia, December Quarter 2005, cat. no. 8752.0.

Dwelling Unit Commencements, Australia, Preliminary, cat. no. 8750.0.

Building Approvals, Australia, December 2005, cat. no. 8731.0, Time Series Spreadsheets.

Engineering Construction Activity, Australia, December Quarter 2005, cat. no. 8762.0.

House Price Indexes: Eight Capital Cities, December Quarter 2005, cat. no. 6416.0.

Housing Finance, Australia, March 2006, cat. no. 5609.0, Time Series Spreadsheets.

NON-ABS

ACT Department of Treasury, First Home Owner Grant (FHOG), last viewed 11 August 2006, <http://www.treasury.act.gov.au/>.

ACT Department of Treasury, ACT Revenue Office, First Home Owners Grants, Data available on request.

FHOG Online Website, First Home Owner Grant - General Information, last viewed 11 August 2006, <http://www.firsthome.gov.au/>.

Housing Industry Association, Affordability Report, December Quarter 2005.

Real Estate Institute of Australia, Real Estate Market Facts, December Quarter 2005.