Strong start for National Housing Accord as building approvals rise

The National Housing Accord has seen a positive start in its first month, with new home building approvals reaching a 14-month high in July 2024, according to data from the Australian Bureau of Statistics.

Master Builders Australia welcomed the news, highlighting a significant increase in higher density home approvals. However, the organisation cautioned that more work is needed to reach the Accord’s target of 1.2 million new homes by June 2029.

Key points from the data include:

New home building approvals rose by 10.4% compared to June
Higher density home approvals increased by 33.7%
Detached home building approvals grew by 0.3%
Detached home approvals are at their strongest level since October 2022
Higher density home approvals are at their highest since November 2023

Master Builders Australia Chief Economist Shane Garrett said, “These increases mean that detached home building approvals are running at their strongest level since October 2022. The volume of higher density home building approvals hasn’t been this high since November 2023.”

Master Builders Australia CEO Denita Wawn added, “Today’s figures show that we have started the Accord on the front foot. However, it will still be a huge challenge for us to deliver the Accord’s target.”

Ms Wawn pointed out that over the past five years, only 940,000 new homes were approved across Australia. In the year to July, 166,140 new home building approvals were received, which, if maintained, would result in about 831,000 new homes over the next five years – falling short of the Accord’s target.

She emphasised the need to continue efforts to boost housing supply and improve the investment environment for new projects, citing several challenges:

Workforce shortages
Poor industry productivity
Lack of critical infrastructure
High taxes and charges
Slow approval processes
Costly union Enterprise Bargaining Agreements

Ms Wawn concluded, “We cannot take the foot off the pedal when it comes to boosting housing supply and improving the investment environment for new projects.”

The data suggests a promising start for the National Housing Accord, but also highlights the significant challenges ahead in meeting Australia’s housing needs.