Apartment incentives in Adelaide’s CBD credited with record $852 million construction spend

THE value of housing construction in South Australia hit a record high last year — thanks to the number of people being lured to live in the CBD.

An artist’s impression of the West Franklin Apartments which is presently under construction on the corner of Franklin and Morphett streets in the city.

• Chinese investors behind apartment boom
• $40m luxury hotel plan for former Channel 9 site
• Billions invested in private construction
• State Government announces $10,000 grant for apartments

INCENTIVES to lure more people to live in the CBD have been credited with the value of housing construction in South Australia hitting a record high.

Construction figures released by the ABS reveal the value of South Australian construction across the residential sector increased to a record $852.75 million in the December 2017 quarter — up by almost $23 million on the previous three months.

The big mover was the apartment and townhouses sector, which hit $218 million in the final three months of 2017, up from $190.5 million for the previous three months and up 48.6 per cent on the December 2016 quarterly spend of $146.9 million.

The Master Builders Association of SA says the figures reflect state and local government focus on increasing the number of residents in the CBD.

MBA SA chief executive Ian Markos said it was likely that the level of activity would continue as buyers took advantage of incentives to attract more people to CBD living.

“Our members reported a strong uptick in activity following the Weatherill Government’s $10,000 pre-construction grant for purchasers who entered into an eligible off-the-plan apartment contract between 22 June and 30 September last year,” he said.

“The Adelaide City Council also offers a “five-year rates holiday” to new owner-occupiers who buy ‘off-the-plan’ dwellings.

“We expect those incentives to flow into construction work statistics in the months ahead.”

He said while the ABS data showed the value of work done for new houses during the December quarter had increased “slightly” to $526.3 million, it was less than the same time three years ago, reinforcing the need for stamp duty relief for first homebuyers.

“Not everyone wants to live in the CBD. Many South Australians want a backyard,” he said.

It comes as the Urban Development Institue of SA released its state election advocacy platform calling for the scrapping of stamp duty on new owner occupier homes up to a value of $460,000 to help more South Australians get on to the property ladder.

UDIA SA chief executive officer Pat Gerace said modelling by consultancy Hudson Howell found removing stamp duty on 1000 homes could create up to 4000 jobs.

“This transactional tax only exists to bring in more revenue to the Government but first homebuyers can end up paying over $16,000 on a house worth $400,000, which just isn’t fair,” he said.

“Unless drastic measures are taken by the Government to remove or significantly reduce this fee more first homebuyers will be forced to stay in rental properties longer and ultimately miss the opportunity to own their own home”