The Australian Bureau of Statistics released its monthly building approvals data for February 2024 for detached houses and multi-units covering all states and territories. Source: Timberbiz
“The last three months of detached house approvals remain down by 3.3% on the same quarter a year earlier, and 37.9% down from the peak three years ago,” stated HIA Senior Economist Tom Devitt.
“The bounce back in detached house approvals from January disguises the continuing weakness in Australia’s housing market.
“Recent leading indicators, such as new home sales, are still struggling to indicate any significant recovery in new home building. This is especially so in NSW and Victoria, where land costs are particularly burdensome for new home buyers.
“Demand for new housing has been falling since the RBA started increasing interest rates in May 2022.
“Multi-unit approvals also remain weak, down by 20.9% in February to record its weakest month in over a decade. This leaves multi-unit approvals 20.4% down on the same quarter last year and less than half the peak of the apartment boom almost a decade ago.
“Higher density housing development is being constrained by labour, material and finance costs and uncertainties, as well as cumbersome planning rules and punitive taxes, especially on foreign investors.
“This lack of new work entering the construction pipeline is occurring alongside record inflows of overseas migrants and a pre-existing acute shortage of rental accommodation across the country.
“It is possible to build the Australian Government’s target of 1.2 million homes over the next five years, but it would require significant policy reforms which include lowering taxes on home building, easing pressures on construction costs, and decreasing land costs,” concluded Mr Devitt.
In seasonally adjusted terms, dwelling approvals in the three months to February increased only in Western Australia, up by 36.6% compared to the previous year. Other jurisdictions saw declines in approvals, led by Victoria (-14.7%), followed by Tasmania (-14.3%), New South Wales (-13.4%), Queensland (-11.7%) and South Australia (-10.6%). In original terms, dwelling approvals declined in the Northern Territory (-45.0%) and the Australian Capital Territory (-32.3%).
