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As reported by the Australian Bureau of Statistics, the total number of dwellings approved in August fell by 6 per cent, to a total of 14,744.
This fall was driven by an 8.1 per cent drop in private dwellings excluding houses, following a 25.8 per cent fall in July. The value of total residential building fell 3.1 per cent, to $9.17 billion.
Apartment buildings were the worst-performing, with a 33.4 per cent drop in approvals throughout August – the second-lowest monthly figure in 12 months.
Australia’s two most populous states, NSW and Victoria, drove the decreases, said ABS head of construction statistics, Daniel Rossi.
Of the 2,704 total apartment approvals, only 527 were in NSW and 342 in Victoria. Meanwhile, Queensland approved 1,368, followed by the ACT with 199, Western Australia with 198, and South Australia with 70.
“The fall in private sector houses in August was driven by the two largest states, Victoria and New South Wales, which were down 8.3 per cent and 6.2 per cent, respectively. In contrast, Queensland rose 2.9 per cent and Western Australia rose 1.7 per cent,” he explained.
Town house approvals fell 19.1 per cent in August to 2,424 dwellings, below the 12-month average of 2,632.
“Only 6,763 apartments were approved in July and August this year, compared to 18,031 during the same period of the 2016 apartment boom. We know we can do better,” said Property Council of Australia CEO Mike Zorbas.
Zorbas said a mix of high construction costs, labour shortages, and low site productivity is slowing down approvals.
“Add complex approval processes and investment-punishing state taxes, and you have the perfect storm,” he said.
“The recent NSW approval reforms are an example of state policy improvements we are seeing across the nation, but we also need governments to lower taxes on institutional investment into apartment construction if we are to have a hope of dialling up housing supply. It is also high time we brought student accommodation into the calculations for our national housing targets.”
With NSW performing particularly poorly throughout August, Property Council of Australia urged the government to pass the NSW Planning Systems Reform Bill.
The bill proposes a suite of changes to the Environmental Planning and Assessment Act, including:
- Establishing a Development Coordination Authority to centralise and speed up agency referrals.
- Enshrining the Housing Delivery Authority in legislation.
- Introducing a Targeted Assessment Pathway for low-risk applications.
- Expanding complying development and creating a statewide Community Participation Plan.
Property Council NSW executive director Katie Stevenson said these reforms will help clear the backlog of simple projects, which will allow the more complex ones to get underway.
“These reforms will help to shift the focus from process to delivery. They will create consistency across councils, give industry greater certainty, and most importantly, help more projects get approved faster,” Stevenson said.
“This Bill is a key test of how serious we are about tackling the housing crisis – Parliament should progress these reforms in a bipartisan way, with the right level of consultation and scrutiny to make them effective.”
Master Builders Australia agreed that reform needs to be made urgently. It called on the government to cut red tape, address skills shortages, and increase productivity.
The organisation’s CEO, Denita Wawn, said the fast-tracking recognition of overseas-qualified workers could help breathe some life into the construction industry.
Wawn said more needs to be done to address the cost of construction, which has jumped more than 40 per cent since 2019.
HIA senior economist Tom Devitt agreed and said if the issue isn’t addressed, the government will not meet its housing targets.
“If Australia is to meet its housing targets and improve housing affordability, policymakers need to reduce the costs of construction that they inflate with needless and destructive taxes, regulations, restrictions and costs,” Devitt said.
[Related: Encouraging downsizing could be the key to increasing housing supply]
