Australian building approvals hit 11-year low in blow to hopes of solution to rental, housing crisis
Australia’s building approvals have slumped to an 11-year low, in a fresh new blow to hopes of a quick solution to our housing and rental crisis.
Australia’s building approvals have hit an 11-year low, in a fresh new blow to hopes of a quick solution to our housing crisis.
According to data released by the Australian Bureau of Statistics: “the total number of dwellings approved fell 8.1 per cent in April, in seasonally adjusted terms, following a 1.0 per cent decrease in March”.
That April figure is the lowest monthly figure in over a decade.
“Total dwellings approved fell to the lowest level since April 2012,” Daniel Rossi, ABS head of construction statistics said.
“The overall decline was driven by a fall in approvals for private sector dwellings excluding houses, which fell 16.5 per cent, to the lowest level since January 2012
“Private sector house approvals also continued to decline, falling 3.8 per cent in April, following a 3.7 per cent decrease in March.”
The slowing rate of construction is likely to exacerbate Australia’s housing and rental crisis, at least in the short to medium term.
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Master Builders Australia said the slowing rate of construction would “impact Australia’s ability to meet its housing target”.
The Albanese Government has pledged to build one million homes over five years from 2024.
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“The reverses in new home building approvals come in the aftermath of twelve months of rising interest rates and inflation at its highest in over 30 years,” Master Builders Australia Acting CEO Shaun Schmitke said.
“The biggest drops were in higher density home building approvals and home renovations falling 16.9 per cent and 26.6 per cent respectively.
“Although demand for medium and high-density housing is surging, the pipeline of new stock is rapidly diminishing.
“The fall in new builds will exacerbate pressures in the rental market at the worst possible time with media reports today showing the portion of income needed to pay rent lifting to the highest level since June 2014
“Builders recognise the importance of a healthy and vibrant building and construction sector in supporting economic growth and addressing the housing needs of a growing population.
“To ensure we continue to supply enough homes to house all Australians, governments need to look at what impact their regulations and policies have on the cost of building homes and on the cost of building social infrastructure.”
Record high immigration is also set to put further strain on Australia’s housing market.
According to the PropTrack New Homes Report – May 2023: “While the government has committed to increasing housing stock, construction industry headwinds and fast population growth may hamper plans to provide a prompt solution to the housing crisis”.
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