The Australian economy is recovering but Queensland is still hamstrung by its restricted finance sector, according to Brisbane-based Economist, Richard Katter of THG.“While popular Australian economic indicators are pointing to an economy in recovery, this is not the case for the construction sector, particularly in Queensland” Mr Katter said.
Mr Katter said of the three largest states, Queensland has suffered the largest impact from the Global Financial Crisis’s contraction of the finance sector.
“Construction finance approved as a proportion of Gross State Product - which puts the states on even pegging regardless of their size - has dramatically reduced over the past two years as the GFC took hold.
“This is most pronounced in Queensland with a decrease in construction finance approved over 2007- 2009 of 57 percent, followed by New South Wales at 52 percent; while Victoria’s construction and development sector appears to have weathered the financial storm better, with a 22 percent decrease.
“As a result, we can expect Queensland’s housing affordability crisis to worsen as supply
continues to be unable to keep up with demand.”
Mr Katter pointed to the excessive regulatory pressure under which the finance system is
operating as a primary factor in the large decrease in finance approvals.
“Queensland’s extended planning timelines, excessive infrastructure charges and anti development legislation are also making developing property increasingly difficult,” he said.
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