Dismal building approvals further distance Australia from housing target
New data released by the Australian Bureau of Statistics (ABS) has revealed that building approvals in April experienced another month of decline, casting further doubt on the achievability of the National Housing Accord.
The ABS’ findings revealed that building approvals within April fell by 0.3 per cent from already-depressed levels, with detached house approvals down 1 per cent and higher density dwellings down 7.5 per cent compared to the year prior.
Master Builders Australia’s chief economist Shane Garrett stated that the data covering the month of April this year represents a “concerning trend” that positions the country to “fall well short of the National Housing Accord target”.
“The new National Housing Accord kicks off in less than five weeks’ time and envisages 240,000 new homes each year. However, the past 12 months have seen less than 163,500 new home-building approvals across Australia,” Garrett said.
Garret declared the 60,600 higher-density dwellings approved over the year to April (2024) as the lowest total for a 12-month period in almost 12 years. The chief economist detailed that a “47 per cent increase in the volume of new home building output” would be necessary to meet the specified target.
Housing Institute of Australia (HIA) senior economist Tom Devitt expressed similar concerns, emphasising Australia’s “record population growth and acute shortages of housing that are expected to persist for at least the next few years”.
“The recent re-acceleration of residential lot prices in some markets suggests the industry could re-encounter land constraints, even as materials and labour constraints ease,” Devitt said.
“With recent inflation data casting further doubt on the prospect of any reduction in interest rates this year, government policymakers need to pull the levers within their reach.”
Devitt stressed the need for state and federal policymakers to work alongside local authorities in addressing the logistical constraints preventing the approval of higher-density development in suburban areas and the release of “shovel-ready land”.
Master Builders Australia’s chief executive, Denita Wawn, urged governments across the country to “do more to get construction activity moving upwards”, stating elsewise “we won’t have any hope of reaching the 1.2 million new home target by 2029”.
“The hurdles are clear to everyone, approval delays, tradie shortages, material cost inflation, out of touch industrial relations changes, inefficient regulation and more,” Wawn said.
“The community is crying out for more housing supply, but if we don’t urgently clear the way for builders to get on with the job, demand will continue to dwarf supply, and Australians will continue to feel the impacts of the housing crisis.”