Despite surging demand and already low stock levels, new house building approvals numbers have fallen, with the Government’s plan to build 1.2 million homes looking further out of reach according to the industry.
According to the Australian Bureau of Statistics, new house-building approvals decreased by 1.9 per cent in November.
HIA Chief Economist, Tim Reardon said the fall in this month’s figures sees approvals in the three months to November 8 per cent lower compared to the same time last year.
“The low volume of building approvals throughout 2023 will see the volume of homes commencing construction continue to slow this year,” Mr Reardon said.
“Other leading indicators of activity in the housing market, such as new home sales and housing finance data, are also consistent with their confirmation of this projected slowdown.
He said the rise in the cash rate is the primary cause of this slowdown in approvals.
“A continued fall in the number of new homes approved indicates a slow start to the Australian government’s ambition to build 1.2 million new homes in five years starting mid-2024,” he said.
In seasonally adjusted terms, decreases in house approvals in the three months to November compared to the same period in the previous year were led by New South Wales (-16 per cent), Victoria (-7.2 per cent), South Australia (-6.6 per cent) and Queensland (-6 per cent).
Western Australia saw a 5.4 per cent increase over the same period. In original terms, detached approvals in the same period fell in the Northern Territory (-30.5 per cent) and in Tasmania (-21.9 per cent), while the Australian Capital Territory saw an increase (3 per cent).
Master Builders Australia chief economist Shane Garrett said just 945,554 new homes have been approved across Australia over the past five years.
“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,” Mr Garrett said.
“However, there was a modest 1.6 per cent increase in the overall number of new home building approvals during November 2023 thanks to a 7.2 per cent gain in higher density approvals.
“More higher density building will help alleviate some of the pressure in the rental market which has seen big inflationary impacts in the economy.
He said labour market shortages, lack of shovel-ready development, planning delays and interest rate rises continue to be the biggest impediments to home building.
