- Building approvals plunge by 9.5% in December 2023, marking a lackluster year.
- Lowest annual approvals in a decade, posing a significant challenge to government targets.
- UDIA calls for intervention to streamline approvals and boost housing supply.
Today, the Australian Bureau of Statistics (ABS) released the building approval numbers for December 2023, allowing for a thorough analysis of the year’s performance. Put simply, the numbers were disappointing.
2023, a lacklustre year for building supply
Total approvals dropped by 9.5% in December, caused by a 22% shortfall in multi-unit approvals.
Underlying the poor conditions in the unit market was a 20% fall in approvals on a rolling yearly basis. The present monthly approval volumes were 34% under the long-term average.
Dwelling units approved
Indeed, the total volume of approvals for the 2023 calendar year was the lowest in a decade, boasting 160,700 approvals altogether, 11% below the annual average attained since 2000.
The Federal Government’s goal of 1.2 million new homes over the coming five years will necessitate around 262,000 approvals per year, an unprecedented volume in Australia and 63% more than the approvals realised in 2023.
UDIA calls for more urgency in delivery homes
The Urban Development Institute of Australia (UDIA) met the news with concern, calling it a setback in Australia’s endeavours to mitigate the housing crisis and reach the National Accord Target of 1.2 million homes within the coming five years.
“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.”
Col Dutton, UDIA National President
UDIA noted that while the Housing Australia Future Fund (HAFF) and the National Housing Accord will deliver around 10,000 houses yearly, the nation still needs the housing industry to deliver 240,000 houses yearly.
In other words, annual approvals must rise drastically if the country is to realise its housing targets. Presently, 262,000 annual approvals are needed for the nation to hit its targets, which is 46% higher than the long-term average volumes since 2000.
The property development peak body pointed out that much of Australia’s housing delivery has depended on the private sector and that more measures were required to ramp up efficiency and land supply.
The underwhelming numbers published by the ABS today underscored the need for more intervention by the government to stimulate and back state and territory efforts to lift housing supply for the long term.
“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,” Dutton said.