UDIA National urges Federal Government to take immediate action to boost housing supply and attainability following ABS figures this week which revealed the lowest building approvals in a last decade and a startling drop in building finance.
In addition to continued drops in approvals for both detached dwellings and approvals, ABS data also showed that owner occupier and investor lending dropping 25% in January, to be 36% and 22% lower respectively than the long-term.
“This data is pointing towards a worsening housing crisis, something that UDIA National has been warning about for the last 12 months,” said Max Shifman, UDIA National President. “We were reading the tea leaves well before the official data came out.”
Total dwellings approvals in January have dropped by 28% in seasonally adjusted terms and are down 27% compared to the long run average. Approvals for detached houses dropped by 23% while apartments declined by 61%.
The value of building fell 18.6%, despite massive cost inflation in materials and skilled labour over the past 18 months.
Lending for first home buyers declined to lowest level in five years with a 24% monthly decline in January, reflecting a 36% 12-month change and 44% lower than the long run average.
“The deteriorating economic environment, the lack of investment confidence and the ongoing challenges of bringing stock to market will continue to put upward pressure on rents and prices, eviscerating any efforts to bring new homes, including affordable and social housing on line,” Mr Shifman said.
“The historical and chronic shortages in development ready land is making this already serious problem worse. We continue to suffer from shortfalls in enabling infrastructure, insufficient zoned land, clogged planning and environmental approval systems, whilst also fighting the challenges of unprecedented cost increases,” he added.
Now more than ever, Federal and State Governments, together with the new Housing Supply and Affordability Council, need to work with the development industry to systematically address this myriad of challenges. This includes properly measuring, monitoring and incentivising the States to meet proper housing supply targets and combat the forces holding back the delivery of new homes.
The Federal Government also needs to adopt UDIA National’s recommendations to ensure the Housing Australia Future Fund can be flexibly designed to harness the capacity of private industry as well as Community Housing Providers to ensure more affordable housing can be built as quickly as possible.
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