Statistics from the Australian Bureau of Statistics (ABS) have found that approvals for detached houses nationwide are on a decline, potentially affecting 1.2 million homes by 2029 target set by the federal government.
While dwelling approvals improved by 1.6 percent in November 2023, detached homes dropped by 1.7 percent. When comparing yearly totals, 70,900 dwellings were approved between July and November 2023, over 10,000 less than 12 months prior.
“The low volume of building approvals throughout 2023 will see the volume of homes commencing construction continue to slow this year,” says Housing Industry Association Chief Economist, Tim Reardon.
“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. 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.”
Master Builders Australia (MBA) Chief Economist Shane Garrett has also reacted to the latest figures provided by the ABS, saying the figures do not bode well for federal targets.
“Today’s figures mean that just 945,554 new homes have been approved across Australia over the past five years,” he says.
“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.
“More higher density building will help alleviate some of the pressure in the rental market which has seen big inflationary impacts in the economy.”
The MBA attributes the lack of approvals to labour market shortages, lack of shovel-ready development, planning delays, and interest rate rises.
The National Housing Accord and subsequent $10 billion Housing Australia Future Fund saw the Commonwealth, states, territories, local government, institutional investors, and construction sector, commit to supporting the delivery of quality affordable housing supply. Some $3 billion in incentives will be allocated to states and territories that fast track development.
The National Housing Infrastructure Facility (NHIF) was also expanded to provide up to $575 million for concessional loans and grants for social and affordable rental housing, along with an injection of $1 billion in federal funding to support more social housing.
