Construction industry is still busy. Image – Canva.
  • Monthly figures down, but year on year is up 52.7%
  • Is likely the result of grants and incentives ending or being scaled back of late
  • Tradie boost announced in WA, and free mediation service in QLD

In the latest Australian Bureau of Statistics figures on building approvals, the numbers are down for the month.

The seasonally adjusted estimate for approved total dwellings fell 7.1% in May, as did private sector houses by 10.3%.

Falls weren’t recorded for private sectors dwellings excluding houses, those figures were up 1.2%, and approved non-residential buildings rose 28.5%.

This is not wholly unexpected, given that generous HomeBuilder and other government incentives had ended or been scaled back over recent months.

Dwellings approved, by building type, seasonally adjusted

Dwellings approved, by building type, seasonally adjusted (2)
Source – ABS.

However, the yearly change is up, total dwellings were 52.7% higher than in May last year, and private sector houses up 55.2%.

Why are figures down?

John Gelavis, Executive Director for Master Builders WA told The Property Tribune that:

“The number of building approvals for new homes dropped back in May as the significant impact provided by HomeBuilder and the WA Builder Bonus starts to fade.”

John Gelavis, Executive Director, Master Builders WA

That wasn’t necessarily the case in the east, Paul Bidwell, Deputy CEO of Master Builders Queensland, told The Property Tribune, “In Queensland, demand has remained steady despite the HomeBuilder grant coming to an end earlier in the year. Approvals for new dwellings moved up 10% over the past three months.”

Industry observations

While loans to owner-occupiers for new houses have slowed, Mr Bidwell said, “demand for new houses from investors is growing stronger, moving up 9% over the past three months.”

“Geographically, demand continues to be spread fairly evenly across the state.”

Paul Bidwell, Deputy CEO of Master Builders Queensland

The West Australian market might be seeing a shift in housing choices, Mr Gelavis said “There appears to be some rebalancing going on in the market, with an apparent switch from detached house building to higher density as medium density approvals rose in WA by 57.7% from April.”

Builders busy, but supply still short

Mr Gelavis said the industry is still extremely busy, and the benefits are significant:

“For every dollar that is spent in the building and construction industry, there is a three-dollar multiplier effect throughout the economy.”

John Gelavis, Executive Director, Master Builders WA

While playing a major role in Australia’s recovery, it has also come up against a number of hurdles.

It is widely known supply chain issues are a major factor, as well as tradie shortages. Costs are also going up as a result, and each state has its own challenges to contend with.

Mr Bidwell said in Queensland, “The current situation is through no fault of builders or their clients, but merely a perfect storm created by the HomeBuilder Grant, ultra-low interest rates, record interstate migration and the early access to Super scheme.”

Queensland is also contending with large levels of migration into the state.

Mr Gelavis said Western Australia was unfortunately impacted by two natural disasters, Cyclone Seroja and the Wooroloo Bushfires.

State action: Queensland and Western Australia

Western Australian tradie numbers are likely to rise following a recent WA government announcement, Mr Gelavis welcomed the new incentive.

“Today’s announcement of a new $5.2 million Jobs and Skills WA Adult Apprentice Employer Incentive (AAEI) for eligible businesses when they hire a mature age apprentice and extension of Apprenticeship and Traineeship Re-engagement Incentive are positive developments by the State Government as they are committed to training and addressing the challenges the industry faces.”

Queensland also introduced the Accelerated Builder/Consumer Dispute service following months of lobbying and consultation from the industry.

While it’s not a silver bullet and won’t solve everyone’s woes, it is a significant step forward and will hopefully ease some of the pressure.

Paul Bidwell, Deputy CEO of Master Builders Queensland

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