Drop in new homes being built in Central Queensland and Mackay

Central Queensland, Mackay and the Whitsundays are experiencing an alarming decrease in new homes. Here’s why builders are worried.

Central Queensland, Mackay and the Whitsundays are seeing a decrease in new homes being built, with a drop of more than 400 homes being recorded across the regions compared to the previous year.

According to Master Builders Central Queensland regional manager Dean Phillips, the downtrend in building approvals in Rockhampton, Yeppoon and Gladstone “accelerated over the past three months”.

Mr Phillips said dwelling approvals were down 30.5 per cent, with house approvals down 43.8 per cent.

However, he said multi-residential/unit approvals in Yeppoon and Gladstone were “propping up the dwelling approval figure”.

Central Queensland is seeing a decrease in new homes being built. Picture: Contributed

Mr Phillips said 586 houses were built in the region in the past 12 months, from November 2022, compared to 700 the previous year, which was a decrease of 16.3 per cent.

He said the biggest influences to the downtrend in building approvals were “uncertainty in the market as red tape, cost of living and construction costs continue to rise”.

“Cut the red tape, focus on affordability and access,” he said.

He said delays in house construction was also still an issue, but improving, with the most common cause being trade contractor/labour availability in the area.

It is a similar story in the Mackay and Whitsunday regions, with dwelling approvals down 19 per cent over the past three months, according to the latest building approval data for November 2022.

Master Builders Mackay and Whitsunday regional manager Malcolm Hull is concerned about falling new home numbers. Picture: Aidan Cureton

Master Builders Mackay and Whitsunday regional manager Malcolm Hull said 655 dwellings were built in the region in the past 12 months, which was down by 34.8 per cent with 1005 homes being built in the previous 12 months.

Mr Hull said Mackay and Whitsunday builders were “building to their best capacity”.

“This is being controlled by the restraints with labour availability, material availability and the financial sector being a bit more restrictive on money lending,” he said.

He said houses in the region were also taking a lot longer to build, compared to the traditional build time of 12 to 16 weeks.

“This has now been extended out to 24 to 36 weeks due to several reasons,” he said.

“These are not restricted to, but major contributors are, labour shortages, material delays, and increased necessities to satisfy building code changes and requirements.”

The building approval data for November 2022 also showed that across Queensland dwelling approvals dropped over the quarter by 14.3 per cent.

Approvals for both detached houses and units were also down with drops of 8.3 per cent and 24.3 per cent respectively.

Construction costs still rising

Construction cost data released by the ABS last week showed costs were still rising, with the cost to build a home in Queensland increasing by 18 per cent over the past 12 months and an eye watering 42 per cent over the past three years.

Master Builders CEO Paul Bidwell said interest rate hikes, supply chain challenges, a lack of building contractors licensed to work in Queensland and a continued flood of new regulation was to blame and together they were serving to tie up the construction of new homes.

“Finding our way through the housing crisis is going to be extremely challenging, it will take a concerted effort from government to tackle blockages in housing supply,” Mr Bidwell said.

Master Builders CEO Paul Bidwell wants to fix the cost and complexity of building new homes. Picture: Tertius Pickard

“But in the end, it’s a no-brainer, we must address the cost and complexity of building a new home.

“We’ve proposed agenda items for the government’s next Housing Roundtable that outlines how the government must look at its own regulation as a starting point.

“The reality is, they are presently leaving builders to work with one arm tied behind their back.

“We’re fighting for a delay to the National Construction Code changes, no further roll out of project trust accounts, simplifying the Minimum Financial Requirements, streamlining of licensing approvals and a statewide Housing Code.

“New regulation is adding more and more cost to building Queensland homes without an equal benefit justifying the cost imposed.

“If the government is committed to fixing the housing crisis, they must also commit to doing what they can to drive down the cost of new housing.”

Master Builders Australia deputy CEO Shaun Schmitke said new home building approvals in Australia bounced back sharply during December 2022.

“Compared with November, 18.5 per cent more new homes were approved,” Mr Schmitke said.

“However, the flow of approvals is still a little weaker than 12 months earlier.

“December’s performance was driven by higher density homes, which jumped by some 58.8 per cent during the month. Approvals for new detached houses dipped by 2.4 per cent during December.

“Detached house building is being held back by insufficient supplies of titled residential land.

“We continue to work closely with governments in order to address some of these obstacles and achieve a sustained pipeline of projects, that are delivered on time and to the standards communities expect.

“Since the pandemic, demand for housing in regional markets has increased significantly.

“There are particular concerns that land supply bottlenecks are an obstacle when it comes to new home building which is impeding their wider development.”