There were just 163,320 building approvals for new housing in the 2023/24 financial year, the weakest financial year in over a decade. The Australian Bureau of Statistics released its monthly building approvals data for June 2024 for detached houses and multi-units covering all states and territories. Source: Timberbiz
“The performance over the last year is a far cry from the 240,000 new homes that the Australian Government wants to see built in each of the next five years,” HIA Senior Economist Tom Devitt said.
“New home approvals are down by 18.7% compared with 2021/22, just as the RBA started increasing interest rates,” he said.
Residential building approvals have declined by a further 7.8% in 2023/24 compared with the previous financial year.
Mr Devitt said that there were 105,920 approvals for detached houses in the past twelve months to June 2024, down by 1.3% on the previous year. This was the second weakest year since 2012/13.
“There were also just 57,400 multi-units approved for construction, down by 17.8% on the previous year and the weakest year for higher density housing since 2009/10,” he said.
“The last time Australia saw this few new homes approved in a financial year was 2011/12, not coincidentally following the RBA’s last rate hiking cycle. At that point, the RBA had already started dramatically cutting rates again.”
Mr Devitt said that performance across different jurisdictions was starting to diverge, with those outside New South Wales and Victoria producing the strongest indicators of a coming recovery.
“Western Australia is leading the way with a recovery in residential building approvals,” Mr Devitt said.
“The weakness of Australia’s two largest states is due to the high cost of delivering a new home to market in Sydney and Melbourne.
“There persists significant uncertainty around the RBA’s battle against inflation. It is up to other policymakers to reduce the cost of construction if Australia were to build sufficient new housing,” he said.
“This means easing of tax and regulatory burdens, bringing infrastructure and shovel-ready land to market faster, implementing genuine planning reform and facilitating higher density development in existing suburbs close to jobs and transport.”
Total dwelling approvals in the 2023/24 financial year in seasonally adjusted terms increased by 23.3% in Western Australia compared to the previous year. All other states declined, led by New South Wales (-17.8%) and Tasmania (-15.1%), followed by South Australia (-9.9%), Queensland (-8.0%) and Victoria (-6.7%). In original terms, the Australian Capital Territory also increased by 16.8%, while the Northern Territory declined by 38.5%.
