While nationwide building approvals have risen to their highest levels in five months to 14,223 in October, year-to-date figures remain at their lowest in a decade, with further interest rate rises and an industrial relations Bill could see numbers plummet once more in the coming months.

Master Builders Australia reports that only 166,236 new homes have been approved across the country, well short of the minimum of 200,000. Chief Economist Shane Garrett is deeply concerned that the target of 1.2 million new homes by 2029, envisaged by the Federal Government’s Housing Accord, will be a “huge challenge.”

“This is in addition to the existing challenge of reducing the cost and time it takes to build,” Garrett says.

“Unless we make concerted efforts to quickly boost housing supply and reduce the cost of building new homes, we will continue to see the housing and rental crisis worsen.

“While some states and territories are making strides at the planning level, the Federal Government is adding extra cost layers to building through their new IR laws, undermining the efforts of housing ministers.

The seven-and-a-half percent gain from September in building approvals is attributed to a pause in interest rate rises, with a 19.5 percent gain in higher density home building approvals.

“This is important because the rental market is currently in desperate need of more medium and high-density homes. The shortage of rental accommodation recently drove rental price inflation to its fastest pace in almost 15 years,” Garrett says

“Delivering more increases in higher density housing output will help to further dilute rental market pressures. New detached house approvals saw modest growth of 2.2 percent during October.

“However, activity on the detached housing side of the market remains at a low ebb due to development-ready land shortages and the detrimental effect of interest increases.”

Master Builders CEO Denita Wawn says she is worried by the industrial relations Bill currently before Parliament which would see independent and self-employed contractors and tradespeople hurt financially by new laws.

“This week we saw the Albanese Government and the Greens brush off the housing crisis and pass damaging reforms that threaten the rights of independent contractors, subcontractors and self-employed tradies to be their own boss,” she says.

"It’s now up to the Senate to allow common sense to prevail and stop this Bill.”

Architecture & Design Team

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