New housing approvals in Australia have fallen to their lowest levels in over a decade, exacerbating the nation's housing crisis. According to seasonally adjusted figures from the Australian Bureau of Statistics released on Thursday, only 166,236 new dwellings were approved in the 12 months to October, the lowest since June 2013.
Industry leaders attribute the decline to high interest rates, soaring material costs, and an insolvency crisis in the building sector. Master Builders chief executive Denita Wawn warned that without concerted efforts to boost housing supply and reduce construction costs, the housing and rental crisis will worsen. She also criticized federal government industrial relations laws for adding extra costs.
Housing Industry Association senior economist Tom Devitt noted that the Reserve Bank's rate hikes, which began in May 2022, have heavily impacted the industry. The pipeline of work under construction is now shrinking, and Devitt expects fewer new houses to be started in 2024 than at any time in the last decade.
The value of new housing has risen sharply, with the average approved house costing $464,000 in October 2023, up 12.5% from $430,000 a year earlier. Stand-alone housing approvals fell 8.1% over the year to 100,678. Tapas Strickland of NAB said housing supply is being outstripped by rapid population growth, making it difficult to ramp up supply without generating inflationary pressures.
