Concerns are growing as building approvals hit a decade low. Image: Canva
  • Low building approvals will increase pressure on the rental market
  • MBA has a list of recommendations to encourage new housing supply
  • Building approvals have hit their lowest levels since April 2012

Master Builders Australia (MBA) Acting CEO Shaun Schmitke says concerns are growing in the building community due to approvals hitting their lowest levels since April 2012.

“According to the Australian Bureau of Statistics (ABS), new home building approvals sank by 8.1% over the month with a total of 11,594 dwellings approved in seasonally adjusted terms,” Schmitke said.

He added that the reverses in new home building approvals come in the aftermath of 12 months of rising interest rates and inflation at its highest in over 30 years.

“The data reflects the cautious approach being taken by developers and consumers in the face of economic uncertainty and high building costs.”

Schmitke says although demand for medium and high density housing is surging, the pipeline of new stock is rapidly diminishing.

Consequences of low building approvals

Low building approvals will increase pressures in the rental market at the worst possible time with media reports recently showing the portion of income needed to pay rent lifting to the highest level since June 2014, according to Schmitke.

“Builders recognise the importance of a healthy and vibrant building and construction sector in supporting economic growth and addressing the housing needs of a growing population”

Shaun Schmitke, MBA Acting CEO

“To ensure we continue to supply enough homes to house all Australians, governments need to look at what impact their regulations and policies have on the cost of building homes and on the cost of building social infrastructure.”

Encouraging growth

In February, MBA published its priorities for delivering Australia’s housing needs by working around the barriers of supply chain issues and cost pressures.

Some of the priorities include:

  • More government-held land should be released for the development of housing.
  • In future, financial payments from payments from federal government to the states and territories should be linked to how much progress they achieve in boosting the supply of new housing.
  • Consideration should be given to measures to help expand the stock of new homes in regional areas so that migrant labour inflows can be accommodated more readily.
  • Continue community, city and regional focused infrastructure funding programs through genuine partnerships across levels of government and with industry.
  • Federal government to offer flexibility in its contractual dealings with building and construction companies whose operations have been hampered by cost spikes, labour shortages and other supply chain complications.
  • Over the longer term, the Government should allow for the National Reconstruction Fund to be fully leveraged to help expand Australia’s onshore manufacturing and distribution capacity with respect to key building materials like timber, steel and modern manufacturing output.


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