New home starts in SA are about to plummet | Kathryn Bermingham

Labor’s plans sound promising – but things are set to get worse before they get better for first home buyers, writes Kathryn Bermingham.

Housing was cemented as the key priority for the state government in this week’s cabinet reshuffle but first home buyers beware: there’s more pain on the horizon.

The reshuffle centrepiece was the creation of a “housing super portfolio”, which is the responsibility of Nick Champion and covers all aspects of housing, housing infrastructure, urban development and planning, including oversight of SA Water.

Premier Peter Malinauskas said the government was “already pulling every lever” to build more homes, but the new portfolio would make sure efforts were “utterly co-ordinated”.

It will address the previous disconnect between agencies involved in housing – on show recently when Mr Malinauskas lashed SA Water over a “failed policy” that has held up the construction of new homes.

It all sounds promising – but things are set to get worse before they get better for first home buyers.

New super housing minister Nick Champion. with Premier Peter Malinauskas, will face an immediate headache. Picture: Matt Loxton

Last week, Master Builders Australia (MBA) forecasting revealed new home starts in SA are set to plummet to fewer than 10,000 next year.

MBA SA chief executive Will Frogley, who labelled the figure “disastrous”, attributed the drop to supply and affordability, including the looming enactment of the National Construction Code (NCC).

The code means that, as of October 1, new homes built in SA will need to meet tougher energy efficiency and accessibility standards.

Mr Champion acknowledged the NCC would add to the upfront cost of housing, but looked to offset criticism by saying the standards could be implemented for less than $10,000 and would “deliver thousands in energy savings for future generations”.

It’s cold comfort for first home buyers desperately trying to scrape together a deposit while watching prices skyrocket.

MBA SA chief executive Will Frogley. Picture: Matt Loxton

As Mr Frogley pointed out: “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”.

For those planning a build in an area deemed to be at risk of bushfire, the upfront costs could be set to soar even higher.

According to Mr Frogley, a planning code amendment relating to bushfire risk could add could add another $21,000 to the cost of a new build in areas slated for construction, such as Riverlea, Two Wells and Angle Vale.

No final decision on the code amendment has been made – and the importance of robust bushfire protection should not be downplayed – but it is yet another cost that homebuyers would have to factor in.

The government may be pulling every lever, but even a super portfolio can’t slow soaring upfront costs.

Originally published as New home starts in SA are about to plummet | Kathryn Bermingham