Home building rate not meeting target

According to recent figures released by the Australian Bureau of Statistics, home approvals have upped only slightly from November 2023 figures - a 1.6 per cent increase with higher density buildings doing all the heavy lifting.

In particular, detached house building approvals slid by 1.9 per cent in November.

“The figures mean that just 945,554 new homes have been approved across Australia over the past five years,” said Master Builders Australia chief economist, Shane Garrett.

“Master Builders has forecast that 2023-24 will see around 170,100 new homes built, well below the 240,000 needed per year to meet the 1.2 million housing accord targets.”

On the other hand, high density housing approvals such as for apartments and townhouses rose by 7.2 per cent in November.

“More higher density building will help alleviate some of the pressure in the rental market which has seen big inflationary impacts in the economy,” Garrett said.

“Labour market shortages, lack of shovel-ready development, planning delays and interest rate rises continue to be the biggest impediments to home building.”

In November, the value of total building approvals fell 9.2 per cent, following an 8.1 per cent rise in October. The value of total residential building fell 2.1 per cent, made up of a 2.0 per cent decrease in new residential building and a 2.4 per cent fall in alterations and additions.

“With a new parliamentary year ahead of us, we hope at the top of all government action lists is how to reduce the time and cost pressures around home building,” said Master Builders Australia Deputy CEO, Shaun.

“We know the cost-of-living crisis is currently being exacerbated by stubborn inflationary impacts in housing.

“Any decision taken by Government needs to consider closely the impact it will have on the cost of doing business.

Schmitke added the proposed ‘Closing Loopholes’ workplace reforms will impact independent contractors and the businesses who engage them, thus slowing down the housing sector.

“If you make it harder to engage independent contractors and casuals, you’re ultimately going to make it more expensive to build,” he said.