The Australian Bureau of Statistics (ABS) on Monday released dwelling approvals data for the month of December, which recorded total approvals of 15,378 in trend terms.
As illustrated in the next chart, approvals have rebounded recently, driven by units & apartments.

Even so, the 15,378 monthly approvals were 23% below the 20,000 monthly run rate to meet the Albanese government’s target of building 1.2 million homes over five years.
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Within the 2024 calendar 12 months, 170,721 properties had been permitted for building. Whereas this was 3.9% larger than the 164,330 properties permitted in 2023, it was 29% beneath the Albanese authorities’s housing goal, which requires 240,000 properties to be constructed yearly.
“Residential constructing approvals in 2024 elevated from the last decade low seen in 2023 however had been nowhere close to the degrees wanted to satisfy underlying demand for housing”, famous HIA Economist, Maurice Tapang.
“This introduced the quantity of approvals within the 2024 calendar 12 months to 170,720, up by 3.9 per cent in comparison with the decade-low ranges of 2023 however nicely beneath something seen within the previous ten years”.
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“It stays a difficult setting given the upper value of borrowing, land and constructing a brand new dwelling. The price of delivering new land to market additionally stays excessive, with land costs persevering with to extend”, Tapang mentioned.
The next chart from Harry Ottley reveals the vast hole between dwelling approvals and the Albanese authorities’s housing goal.

The hole between housing provide and demand additionally stays huge, as illustrated within the following chart.
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The decline in indifferent home approvals has additionally been matched by the HIA’s new dwelling gross sales figures, which have stalled.

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“The variety of dwellings being permitted stays nicely beneath what’s required to ease the housing scarcity and meet authorities targets”, famous CBA economist Harry Ottley. “However latest progress has been encouraging, albeit gradual”.
“We count on decrease rates of interest in 2025 to stimulate extra constructing activityin coming years”.
Certainly, the subsequent chart from Ottley means that rate of interest cuts are a needed precondition for an increase in housing building.

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The next chart from the RBA additionally reveals the historic relationship between mortgage charges and dwelling approvals.

Even when the RBA cuts rates of interest this 12 months, they’re more likely to stay structurally larger than they had been pre-pandemic.
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Mixed with the structural improve in building prices, this means that Australia’s building rebound will probably be stunted.

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The logical coverage response from the federal government ought to be to scale back demand commensurably by reducing internet abroad migration to a stage appropriate with the provision aspect.

Sadly, Australian policymakers and housing “consultants” refuse to acknowledge this fundamental reality and proceed to current the housing scarcity as a provide drawback.
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