Builders see ministerial reshuffle as chance for coordinated approach
The total number of dwellings approved in Australia fell by 6.5% in June to 13,237, following a 5.7% rise in May, according to figures released today by the Australian Bureau of Statistics (ABS).
According to Daniel Rossi, ABS head of construction statistics, there were 162,892 dwellings approved over the past 12 months, compared to 177,936 in the previous year, marking an 8.5% decrease in original terms.
“This is the lowest number of dwellings approved on a financial year basis since 2011/12,” Rossi said.
Private sector houses saw a 0.5% decline in June, largely driven by a 19% drop in New South Wales. The state recorded 1,597 private houses approved, the lowest figure since January 2013.
The latest dwelling figures also showed that material and labour shortages continue to impact the housing sector, with the average approval value for new houses rising by $19,444 from June 2023 to June 2024.
Private sector dwellings excluding houses fell by 19.7% in June, reaching the second lowest monthly level since January 2012. This represents a yearly fall of 22.1% compared to the same month last year.
“Conditions for apartments remain challenging due to high construction costs and higher interest rates,” Rossi said.
In original terms, 29,388 apartment units were approved in the 12 months to June 2024, compared to 40,443 in the previous year.
The value of total building approved fell by 7% to $12.06 billion in June, following a 0.4% rise in May. The decline was mainly driven by non-residential building, which fell by 16.2% to $4.46 billion.
Total residential building value fell by 0.6% to $7.61 billion, after a 2.7% rise in May. The value of new residential building decreased by 2.3% to $6.44 billion.
“We saw a glimmer of hope during May, but this downturn in June means the industry is starting the Housing Accord period on the wrong foot,” said Shane Garrett (pictured above left), chief economist at industry association Master Builders Australia. “This was driven by an 18.4% reduction in higher density dwelling approvals, their lowest monthly total since July 2012.
“Annual building approvals are now at their lowest levels in over a decade despite strong signals from government to increase housing supply. If approvals continue at this level, Australia will fall 385,000 homes short of the 1.2 million Housing Accord target.”
Denita Wawn (pictured above right), chief executive of Master Builders Australia, stressed the need for broader policy action.
“It’s clear more needs to be done, particularly in policy areas outside of the housing portfolio which are driving up building costs and blowing out construction times,” Wawn said. “The industry is hopeful that the recent ministerial reshuffle will provide an opportunity for a refreshed ‘whole of government’ approach to the housing crisis.
“Addressing the housing crisis requires a holistic approach with input from multiple portfolios from industrial relations, infrastructure, procurement, immigration, to skills and training.”
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