With dwelling approvals at the lowest level in more than a decade, Urban Development Institute of Australia calls for urgent action to reverse this concerning trend.
According to today’s construction statistics released by the ABS, the decrease in the total number of dwellings approved in July was led by a sharp drop in approvals for private sector dwellings (including semi-detached, row or terrace houses, townhouses and apartments but excluding houses) which dropped by 43.5 per cent.
Approvals have been declining over the past few years and are now at the lowest level recorded since January 2012.
“Our concern is that this disproportionately impacts the more affordable end of the market, with reduced supply for those seeking to buy smaller dwellings such as townhouses or apartments, particularly near activity centres, close to established amenity,” said Maxwell Shifman, National President of UDIA.
This precipitous decline reflects the many challenges affecting the attached housing market, including continuous increases in red tape, planning regulations, rapidly escalating construction costs, and the removal of investment incentives (such as off-the plan stamp duty concessions and increased foreign investor surcharges). This has been exacerbated with the general negative concerns that have been growing against apartment living.
“Unless these issues are addressed with a great urgency, we will see a continued push away from densification in our cities, and even more pressure on greenfield development,” added Mr Shifman. “At a time when we need to be planning for population growth after a two-year hiatus, the last thing Australians can afford is a reduction in new home supply”.
UDIA National calls on governments to do everything possible to improve new dwelling approvals and supply, including reducing the regulatory burden, implementing cost reducing measures, and reintroducing incentives for off the plan buyers and investors to help underpin the viability of new projects.
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