Variety of factors blamed for Townsville’s plunge in new house approvals

Despite Townsville’s desperate need for more housing, residential dwelling approvals have crashed to their lowest level in five years. See what’s driving the problem.

Master Builders North Queensland regional manager Alana Hopkins (inset) has explained why new home approvals have plunged in Townsville. Picture: Supplied.

Despite Townsville’s desperate need for more housing stock, the city is going in the wrong direction, recording its lowest number of new residential house approvals in the past five years.

A variety of factors are being blamed for the lack of new housing in the pipeline, which was revealed in the latest Development Activity Report, presented during Townsville City Council’s October meeting of the Planning and Development Committee.

The report showed that 81 new dwellings had been approved in the first quarter of the 2023-24 financial year, well down on the 133 in the previous quarter, and less than half the 186 approvals at the same time last year.

There has been a downward trend since the 2021 pandemic-peak of 318 approvals, with approvals previously bottoming out at 74 in late 2018.

While dwelling approvals were dropping around the state, Master Builders North Queensland regional manager Alana Hopkins said Townsville was one of the most affected regions.

Quarterly comparison of new dwelling approvals between 2017 and 2023. Picture: TCC.

She blamed high construction costs, which were rising ahead of the market value, making it harder for new projects to stack up, despite the underlying demand for new housing.

It was worsened by increasing labour costs, labour shortages, rising materials prices, National Construction Code changes, and taxation on housing.

“According to local builders in Townsville, supply is starting to catch up. While there are still delays, it’s looking more positive,” Ms Hopkins said.

“In North Queensland, transport costs are also an issue, with rising fuel costs and distance contributing to the rising cost to build.

“While the pipeline of work is welcomed by the industry, the massive, planned construction program for the energy transition, new hospitals, the Olympics and large national housing targets will all continue to keep pressure on supply chains.”

Master Builders North Queensland regional manager Alana Hopkins said there were a number of factors driving down new dwelling approvals. Picture: Supplied.

Ms Hopkins said there was no one silver bullet solution for this complex problem.

Master Builders was actively promoting the career opportunities available and encouraging school students and others to join their industry, had campaigned for a delay to the rollout of “costly” National Construction Code amendments, and for the establishment a construction innovation centre to support a transition to modern construction methods.

“We have also pushed for measures to incentivise housing, such as taxation relief,” she said.

Planning and Development Committee chairman Mark Molachino said he was hearing from people saying that it was difficult to build houses at the moment.

He suggested that people might be staying in their rentals until building conditions improved, that the banks might be making it harder to get loans approved, or high interest rates could be discouraging buyers.

“We’re starting to see a bit of a fix on that supply chain issue but we are struggling with the trades … just trying to get a tradie sometimes is an absolute nightmare,” Mr Molachino said.

“We know the government’s investing heavily in training and apprenticeships and stuff like that, which is good but we won’t see the results of that until years down the track – plus trades are competing with mining.”

Townsville City Council offers first home buyers $1000 off the rates bill on their new property as part of the council’s First Home Buyers Concession Policy.

“I certainly want to have a look at tweaking those incentives (to build more houses),” he said.

Originally published as Variety of factors blamed for Townsville’s plunge in new house approvals