Declining Building Approvals a blow to ambitions to ease housing crisis

“Today’s Australian Bureau of Statistics data on declining building approvals is a blow for Australia’s ambitions to ease the housing crisis and build the National Accord Target of
1.2m homes within 5 years according to the Urban Development Institute of Australia (UDIA).

“This is the worst time to see building approvals declining and reflects the extent of the task ahead to start driving housing supply and take pressure off prices and rents,” said Col
Dutton, UDIA National President.

While the Housing Australia Future Fund (HAFF) and the National Housing Accord will build about 10,000 houses a year (annualised), we need the industry to deliver 240,000
houses a year which means we need approximately 262,000 annual approvals to realise this number of new homes, which is 46% higher than the long-run average volumes
achieved since 2000.

The lion’s share of the delivery depends on private housing providers and we need to put in place measures that ramp up productivity and land supply. Today’s numbers show
there is plenty of work to be done by Federal Government to incentivise and support state and territory action that boosts housing supply over a sustained period.

“We need the entire market to be able to access streamlined planning that, at the very minimum cuts approval times and processes in half, implements efficient environmental
approvals, rapid conversion of zoned land to development ready land and introduces incentives that support those delivering housing to viably increase affordable housing,”
said Mr Dutton.

UDIA is working closely with all spheres of government to drive change that can result in homes built for all Australians.
Key Facts:

  • ABS dwelling approval figures released today provide December 2023 numbers and allows for analysis of the complete 2023 calendar year.
  • Total approvals fell 9.5% in December driven by a 22% decline in multi-unit approvals (seasonally adjusted).
  • The on-going weakness of the unit market is underscored by a 20% decline in approvals on a rolling 12-month basis, with current monthly approval volumes 34% lower than the long run average.
  • The total volume of approvals achieved in the 2023 calendar year is the lowest in a decade, with a total of 160,700 approvals (trend) which is 11% lower the annual average achieved since 2000.
  • The Federal Government’s target of 1.2 million new homes over the next five years will require an average of 262,000 approvals a year – a volume never achieved in Australia and an alarming 63% higher than the approvals achieved in 2023.

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