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The Australian Bureau of Statistics today released its monthly building approvals data for April for detached houses and multi-units covering all states and territories.
“Detached house approvals increased by 1.4 per cent in the three months to April 2022 to be 16.8 per cent higher than the same three months in 2019.
“Renovations activity also remains elevated. The value of renovations approvals jumped by 6.6 per cent in April to be up over the last 18 months by 42.6 per cent on pre-pandemic levels.
“At the end of 2021, there were 75.7 per cent more detached homes under construction than pre-COVID. There are now more homes approved and waiting commencement than in any previous cycle.
“Together with similar new home building and renovations booms in other developed economies, this has placed significant demands on the international supply of building materials, along with local supplies of land and labour. This has combined to create ongoing increases in the cost of construction.
“This will sustain Australia’s elevated number of homes and renovations under construction and keep Australia’s already-stretched home builders busy until at least June 2023.
“It will also delay the adverse impact of rising rates on the industry, and therefore the wider economy.
“Multi-unit approvals increased by 7.4 per cent in the three months to April 2022.
“An acute rental shortage and deterioration in affordability has seen strengthening demand for multi-units, including high rise apartments. There are early signs that overseas migrants – who tend to favour higher density living – are returning. These factors will support demand for multi-unit construction going forward.
“With detached home building and renovations activity remaining at capacity until at least June 2023 and demand for multi-units returning, the shortage of building materials and labour will continue to be the main pinch point for the industry,” concluded Mr Devitt.
In seasonally adjusted terms, total residential building approvals increased in the last three months compared to the previous quarter in Victoria (+9.9 per cent), New South Wales (+8.6 per cent) and South Australia (+4.3 per cent). Declines were seen in Queensland (-4.5 per cent), Western Australia (-9.8 per cent) and Tasmania (-17.1 per cent. In original terms, approvals increased in the Northern Territory (+115.2 per cent) but declined in the Australian Capital Territory (-5.2 per cent).
“The long-discussed move of the University of Tasmania (UTAS) from the Sandy Bay campus presents a real opportunity to ease housing pressures in Greater Hobart,” said Stuart Collins, HIA Executive Director Tasmania.
The Victorian Government has announced it is proposing Regulations that will require building practitioners and plumbers to meet Continuing Professional Development (CPD) requirements. A Regulatory Impact Statement and proposed regulations has been released for public comment.
HIA commented on the Explanation of Intended Effect (EIE) which outlines proposed changes to encourage more low-rise and mid-rise housing (December 2023).
“Australia is set to commence construction on little more than a million new homes over the next five years, almost 200,000 short of the Australian government’s target,” stated HIA Senior Economist Tom Devitt.