Key takeaways:
- June 2024 saw 13,237 new dwellings approved, a 6.5 per cent decline from May.
- Only 163,000 homes were approved in the 2023/24 financial year, 77,000 short of the Housing Accord target.
- Higher-density dwelling approvals dropped 18.4 per cent in June, the lowest since July 2012.
- Annual building approvals are at their lowest in over a decade.
- If current approval rates continue, Australia could fall 385,000 homes short of the 1.2 million Housing Accord target.
- Industry challenges include worker shortages, slow planning approvals, and rising building costs.
The Australian Bureau of Statistics (ABS) has released its June 2024 building approvals data for detached houses and multi-units across all states and territories. Despite a slight increase earlier this year, approvals remain at near-decade lows, with NSW significantly impacting national figures.
In June, approvals for new dwellings totalled 13,237, marking a 6.5 per cent decline from May. Over the 2023/24 financial year, only 163,000 homes were approved, falling 77,000 short of the annual Housing Accord target, according to Master Builders Australia's chief economist, Shane Garrett.
“We saw a glimmer of hope in May, but June's downturn indicates the industry is starting the Accord period on the wrong foot," said Garrett. "This was driven by an 18.4 per cent reduction in higher-density dwelling approvals, the lowest monthly total since July 2012. Annual building approvals are now at their lowest levels in over a decade, despite strong government signals 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."
Master Builders Australia CEO Denita Wawn highlighted the need for broader policy reforms to address the issue. “More needs to be done, especially in policy areas outside the housing portfolio that are driving up building costs and extending construction times. The industry hopes the recent ministerial reshuffle will lead to a refreshed, whole-of-government approach to the housing crisis. Addressing this crisis requires a holistic approach with input from industrial relations, infrastructure, procurement, immigration, and skills and training."
Wawn added, "Australian builders are ready to build new homes, but they're currently hindered by worker shortages, slow planning approvals, and critical infrastructure delays. High taxes and charges are deterring investment, and combined with industrial relations challenges and recent union misconduct allegations, costs and building times are escalating. Over the last decade, industry productivity has fallen 18 per cent, and building costs have increased by 40 per cent over the last five years."
The construction industry remains committed to addressing these challenges and working with the government to meet Australia's housing needs.
