August building approvals fall short of national housing target

The total number of dwelling approvals in Australia fell by 6.1 per cent in August to 13,991, according to new data from the Australian Bureau of Statistics (ABS).

This decline follows an 11 per cent rise in July and has raised concerns about meeting the national housing target.

While detached house approvals increased by 0.6 per cent to a two-year high, higher density home building approvals dropped by 17.5 per cent.

Shane Garrett, chief economist at Master Builders Australia, said: “Over the past year, a total of 166,230 new homes have been approved across Australia. If we remain stuck at this rate of new homes building over the lifetime of the National Housing Accord, only about 832,000 new homes will get delivered.”

Garrett added: “This would represent a shortfall of over 365,000 homes relative to the 1.2 million new home target set by all levels of government for the Accord.”

Tim Reardon, chief economist at the Housing Industry Association, offered a more optimistic view, noting that house approvals in the three months to August 2024 were 11.2 per cent higher than the same period last year.

Reardon said: “The steady increase in detached house approvals is offsetting a low volume of multi-unit approvals.”

He added: “Rising tax imposts on foreign investors and rising regulatory costs are compounding the challenges for apartment builders.”

Within capital cities, Reardon observed that “house approvals in Perth and Brisbane are faring much better than in Sydney and Melbourne.”

Western Australia and Queensland saw the largest increases in housing approvals over the past 12 months, at 47.5 per cent and 19.7 per cent respectively.

Denita Wawn, chief executive at Master Builders of Australia, emphasised the importance of high-density housing in addressing the crisis.

Wawn said: “If we are to bring about a quick end to the housing crisis, we need a strong and consistent supply of high-density housing to the market.”

She concluded: “With higher density building approvals lower now than a year ago, today’s data reinforces the need for serious action on inflation to encourage new home ownership and more private investors into the market to generate urgently needed new homes.”

Industry leaders are calling for decisive measures to boost housing supply and meet the national target of 1.2 million new homes.