‘Disastrous’: New home starts in SA are set to plummet lower than 10,000 next year

New home starts in SA are set to plummet next year in what a leading industry body has labelled a “disastrous” result amid the current housing crisis.

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New home starts in SA are set to plummet to fewer than 10,000 next year, in what a leading industry body has labelled a “disastrous” result amid the current housing crisis.

Master Builders Australia (MBA) has blamed the forecast drop on factors including supply, affordability and the impact of the looming National Construction Code (NCC).

In its latest building and construction industry forecasts, released Tuesday, MBA has forecast that new home commencements will fall by 28.4 per cent from 13,899 in 2023-24 to 9950 in 2024-25. Smaller increases are forecast for subsequent years.

MBA SA chief executive Will Frogley said “building less than 10,000 homes next year would be disastrous for South Australia’s industry and economy”.

Asked about the reasons behind the grim prediction, Mr Frogley said the NCC, due to take effect in October, would push up the cost of housing.

New home starts in SA are set to plummet lower than 10,000 next year. Picture: Supplied.

“On one hand you have people in government trying to do the right thing and, for example, abolishing stamp duty on new builds. But then you have that totally outweighed by changes to the NCC,” he said.

Mr Frogley said bushfire regulations under consideration could add up to $21,000 to the cost of a new build in areas the slated for construction, such as Riverlea, Two Wells and Angle Vale.

He called on the government to push back on the “out-of-touch, highly-paid bureaucrats” responsible for developing the code.

“A lot of them are in comfortable homes already and they’re trying to bring in things that they won’t have to pay for but they’re expecting the first homebuyer to,” he said.

“We need to have a full-court press on this issue and push back strongly against anything that’s going to increase the cost of building.”

Mr Frogley added that SA would not be able to deliver more homes without sufficient government funding for water and sewerage infrastructure.

“If there isn’t significant investment in those areas, that’s going to constrain housing activity, particularly in areas where (the government) are focused on,” he said.

Planning Minister Nick Champion said the building industry across Australia was facing challenges, including market capacity, supply chain disruption and workforce uncertainty.

“This government is making significant investments to address these issues,” he said.

“In the last budget we provided a major boost for the skills and training sector to address the skills shortage.”

Mr Champion acknowledged the NCC would add to the upfront cost of housing – but said it was “set to deliver thousands in energy savings for future generations”.

“Modelling and estimates of government show the new standards, including liveability changes, can be done for less than $10,000,” he said.

“These new standards will benefit all South Australians – leading to cheaper energy bills and cost of living relief.”