Australia’s housing supply pipeline has weakened further, with the latest Australian Bureau of Statistics (ABS) figures showing building approvals fell sharply in August, prompting industry leaders to call for faster action to get new homes underway.
Total dwelling approvals dropped 6.0 per cent over the month, driven by a 10.6 per cent decline in apartments and townhouses, while detached house approvals also fell 2.9 per cent and sit 3.8 per cent below the same time last year.
Master Builders Australia Chief Economist Shane Garrett warned the slowdown is a risk to long-term supply.
“This trend is deeply concerning because approvals are the pipeline for tomorrow’s housing supply,” he said.
“With apartment approvals in particular now at some of the lowest levels seen over the past 12 months, the industry faces serious challenges meeting demand.”
Mr Garrett said higher density construction must play a bigger role if Australia is to make meaningful progress on housing affordability.
“The only way out of the housing crisis is to build more higher density housing. Apartments and townhouses must make up at least half of all residential construction if we are to meet demand and give Australians more affordable options in the places they want to live.”
Master Builders Australia CEO Denita Wawn said the fall in approvals highlights the gap between policy ambition and market reality.
“Approvals heading backwards are a flashing red light; unless the Government acts now to fix the pipeline, Australia’s housing crisis will only get worse,” she said.
Ms Wawn pointed to workforce pressures and rising construction costs as key barriers.
“Red tape, constant regulatory changes and a crippling skills shortage are draining productivity,” she said.
“Fast-tracking recognition of overseas-qualified workers, implementing a dedicated construction visa pathway, and offering stronger incentives for employers to take on apprentices are critical to building the workforce we need.”
She added that costs have surged more than 40 per cent since 2019, while finance and insurance pressures are forcing many projects off the table.
“Without urgent action to ease pressures and restore confidence, more projects will stall before they even start,” she said.
“The Treasurer’s Economic Reform Roundtable highlighted the importance of productivity and skills to lifting housing supply, but we now need to see action on the ground to get projects moving.”
Industry groups say that reversing the approvals decline, particularly in apartments and townhouses, will be essential to meeting housing demand and easing affordability pressures in the years ahead.
