This article is from the Australian Property Journal archive
BUILDING approvals saw a boost in the first month of the Albanese Government’s National Housing Accord, hitting a 14-month high.
According to the latest ABS data, new housing approvals were up 10.4% to 14,797 for July, following a 6.4% drop over June.
The uptick was driven by apartment approvals, which increased by 32.1% to 5,234 approvals, and high density housing which was up 33.7%.
“This jump is not however a concrete indication of a turning point for apartment construction. Outside of some niche markets, the run up in interest rates continues to weigh on apartment presales,” said Maree Kilroy, senior economist at Oxford Economics Australia.
Meanwhile, detached home building approvals were up by a slighter margin of 0.3% over the month.
“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,” said Shane Garrett, chief economist at Master Builders Australia.
New South Wales saw the greatest approval growth, at 8.5%, followed by South Australia with a 4.8% increase and Western Australia up 4.7%.
While Queensland was down 5.2% and Victoria was down 1.7%.
July marked a good start for the government’s National Housing Accord, which is targeting the delivery of 1.2 million new homes by June 2029.
“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. Over the past five years, just 940,000 new homes were approved across Australia,” said Denita Wawn, CEO at Master Builders Australia.
“More ominous is the fact that 166,140 new home building approvals were received over the year to July. If we remain at this pace, we’re looking at creating about 831,000 new homes over the next five years.”
The total number of home approvals still sits 5.1% below the five-year average, with just 165,443 dwellings approved over the last 12 month, down from 175,770 in the year prior.
“While it’s pleasing to see the number of housing approvals rise in July, we are still building at levels below what we were building five years ago. We simply won’t hit our housing targets if we don’t continue to increase the number of homes approved. We need to see results like this, month after month,” said Matthew Kandelaars, executive of policy and advocacy at the Property Council of Australia.
“Our national target of 1.2 million new homes should be easily attainable for a wealthy, land-rich country like Australia but instead we’re behind the line as the starter’s gun is fired on our 2029 target.”
Australia also needs an additional 83,000 tradies to meet the National Housing Accord target, according to the Housing Industry Association.
