Decade-Low Building Approvals: A Looming Crisis for Australia’s Housing Ambitions?

 


Recent statistics from the Australian Bureau of Statistics a worrying trend: the total number of dwellings approved in April has fallen by 0.3%, with approvals down in three of the seven states. This downturn threatens the Australian government's ambitious plans to address the housing crisis. 

Dr Michael Fotheringham from the Australian Housing and Urban Research Institute, quoted in an ABC article this week, emphasised that this decline is part of a broader trend in the struggling building sector. Consumer confidence in investing and building new homes has dwindled due to rising interest rates and cost-of-living pressures, compounded by significantly increased costs in housing construction. Despite the drop in approvals, the value has remained stable, suggesting that we are investing the same amount of money but building fewer homes. 

The federal government's recent pledge of $9.3 billion to achieve a national housing target of 1.2 million new homes by 2029 is at risk. Dr Fotheringham noted that achieving this target requires a shift from the current downward trend to an upward one, stressing the need for higher construction rates in the coming years. 

Matthew Kandelaars from the Property Council shared the same concern, pointing out the high costs of construction, labour availability issues, outdated state and territory planning systems, and tax policies that discourage global investment in Australian housing. 

Let's hope for a concerted effort to turn these trends around and ensure the ambitious housing targets become a reality for Australia. 

Read full article here https://www.abc.net.au/news/2024-06-06/building-approvals-stats/103944218 

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