This article is from the Australian Property Journal archive
AUSTRALIA fell nearly 70,000 homes short of its National Housing Accord target in calendar 2024, official data shows, with all states and territories needing to play an intensive game of catch-up if they’re to meet their five-year obligations.
Numbers from the Australian Bureau of Statistics found the total number of dwellings approved rose 0.7% in December to 15,174, after a 3.4% fall in November.
The monthly rise was driven by 15.2% growth in apartments and townhouses. Approvals for detached homes fell for the third straight month, down 3.0%,
That meant a total of 171,394 dwellings were approved across the 2024 calendar year.
This was 4.7% higher than the 163,722 dwellings approved in 2023, but still 68,606 homes short of federal cabinet’s National Housing Accord target of 240,000 per year until the middle of 2029. The target has been thrown in doubt due to capacity constraints, labour issues and high materials costs in the construction sector.
The National Housing Accord is aiming to pump supply into a heated market that has seen affordability for buyers and renters stretched to unprecedented levels, putting housing at centre stage in the lead-up to the upcoming federal election.
Since the onset of COVID, rents have surged by more than 36%, equivalent to a rise of $171 per week. Vacancy rates in the rental market remain crushingly low as the result of a severe housing undersupply.
Buyers, meanwhile, have been dealing with record house prices across the country.
In original terms, 108,167 detached homes were approved in 2024, showing 7.3% rise from 2023. Private sector dwellings excluding houses totalled 59,312, for a 1.3% fall.
Higher density approvals dropped back by 1.3%, making 2024 the worst year for higher density approvals since 2011.
“The insufficient flow of new home building on the higher density side of the market is one of the main sources of rental price inflation,” said Master Builders economist Shane Garrett.
Recent official data indicated that rents rose by 6.2% over 2024, making it one of the biggest sources of inflationary pressure.
Master Builders CEO Denita Wawn said Australia “desperately” needs to boost housing supply, and this will “only be achieved when the cost of new home building starts to moderate, and project costs stack up”.
Construction pressures are expected to remain “stubbornly” elevated until at least 2027, according to WT’s latest Australian Construction Market Conditions Report.
“It’s more than just a number – the lack of housing supply is leading to rising rents, homelessness, and higher mortgages, which impacts the well-being of individuals, families, and communities,” Wawn said.
A new report from the Productivity Commission shows nearly 42% of low-income households that received Commonwealth Rent Assistance (CRA) were still paying more than 30% of their income on rent in 2023/24.
The number of households on social housing waiting lists is 223,959, including 109,462 in greatest need on the priority waitlist, marking a 3% increase.
Specialist homelessness services were provided to 280,100 people in 2023/24, according to the Australian Institute of Health and Welfare.
The ABS data revealed 42,800 new building approvals across NSW in 2024, 5% below that of 2023, and 42% lower than the calendar year peak of over 73,000 approvals in 2016.
“Without a pivot back to feasible greenfield development with a diversity of housing typologies, NSW will keep falling further behind its housing targets,” said Urban Development Institute of Australia CEO Stuart Ayres.
“These poor building approvals reinforce the desperate need for reform of the Planning Act and urgency in implementing the low and mid-rise reforms,” Ayres said.
