Home boom dream hit by harsh reality check

This state’s plan to build its way out of a housing crisis has been hit hard by what actually needs to be done to meet targets.

QUEENSLAND’S plan to build its way out of a housing crisis has had a reality check, with a leading industry body estimating the state needs to build nearly 50,000 new homes a year for the next five years to meet a key national target.

In the 12 months since the federal government announced its one million new homes plan, Bureau of Statistics figures show only 34,000 new homes were approved across the state in the year to October — 2,800 fewer than in the year prior to the announcement.

A tradie on a Metricon building site. Picture: David Caird.

Housing Industry Association (HIA) estimates show that to reach the national five-year target, Queensland would have to build a minimum of 49,123 new homes each year.

The ABS figures also show the average cost of building a new house is now $447,316 —$28,000 more expensive than it was only 12 months ago when federal treasurer Jim Chalmers announced the building boom plan, which has since been upped to 1.2 million homes.

.HIA chief economist Tim Reardon said Queensland would be wise to push for more public and social housing construction next year as a way to avoid losing tradies until interest rate cuts spurred confidence among families and first-home buyers.

Mr Reardon said Queensland could snatch Victoria’s coveted population growth crown, and with a reasonable effort into building new homes, lock in 2 per cent gains in its population at least until the Olympic Games in 2032.

Tim Reardon, chief economist at the HIA.

Master Builders CEO Paul Bidwell said the good news was that Greater Brisbane, Sunshine Coast, and Central, North and Far North Queensland saw detached housing approvals trend upwards over the three months to the end of October.

“It remains clear that across the board, the supply of new housing is still headed in the wrong direction,” Mr Bidwell said.

“The soaring cost of living, critically-low rental vacancy rates, and mortgage stress are being felt by all Queenslanders — and additional pressures are compounding the situation for our building and construction industry.

Master Builders CEO Paul Bidwell in Brisbane. Picture: Tertius Pickard

“The changes to the National Construction Code (NCC) that commenced in Queensland this year, including livable housing provisions, are clearly having an impact. While we of course support inclusive and sustainable housing, we also support affordable housing. The cost to build in Queensland has increased as a result of the new requirements.”

PropTrack economic research executive manager Cameron Kusher said the home approval plunge in Queensland and a 27,000 drop nationwide was a “clear reality check” that we would be “well behind where we need to be in terms of building new houses” by next July.

“And the prospects of catching up are really low,” Mr Kusher said.

HIA estimates show Queensland needs to build a minimum 49,123 new homes a year to reach the national five-year target of 1.2 million.

“I’m certainly not convinced that we can get anywhere near where we need to get for construction, we have never built 240,000 homes in a year nationally — let alone for five consecutive years.”

He said that despite a range of announcements already aimed at streamlining housing supply, governments would have to look at softening infrastructure pipelines and ways to increase skilled migration for trades.

Mr Kusher also warned it might take longer than the federal government’s five year timeline from 2024-2029 for the gap to narrow between established home prices and the cost of building a new home, which would also encourage more construction.

Originally published as Home boom dream hit by harsh reality check