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{{propApi.successMessage}} {{region}} Change locationAustralia is not commencing enough housing to meet 1.2 million target
Australia is not commencing enough housing to meet 1.2 million target
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The ABS today released its building activity data for the September Quarter 2023. This data provides estimates of the value of building work and number of dwellings commenced, completed and under construction across Australia and its states and territories.
“This data reveals there were 103,707 detached houses that commenced construction in the twelve months to September 2023, down by 17.0 per cent on the 124,940 commenced in the previous twelve-month period,” added Mr Devitt.
“This points to a slow start to National Cabinet’s ambition to build 1.2 million homes over the next five years starting mid-2024.
“Since the RBA’s first cash rate increase in May 2022, sales of new homes have tumbled. A number of earlier projects are also being cancelled, with banks withdrawing finance in the face of soaring building costs and shrinking homebuyer borrowing power.
“This lack of new work entering the construction pipeline is expected to produce a trough in new house commencements in 2024, when Australia will start construction on just 95,400 new houses, the weakest year in over a decade.
“There was also a decline in the number of multi-unit projects commencing construction, down by 9.6 per cent in the September Quarter 2023 to just 13,916, one of the weakest quarters in over a decade.
“Multi-unit commencements are mounting a recovery on the back of population growth and land constraints, with Australia expected to commence 84,400 new multi-units in 2024.
“This would still put total detached and multi-unit commencements at less than 180,000 in 2024, far below the 240,000 per annum required to meet National Cabinet’s target.
“As fewer new projects begin construction, the pipeline of work that Australia’s home builders have under construction is expected to shrink rapidly this year.
“Meeting National Cabinet’s target will be largely dependent on the delivery of adequate private housing across the housing continuum. This will also have the biggest impact on the cost of housing and rental availability.
“Holding all levels of government to account for improving planning regimes, reducing red tape, and supporting the development of appropriate infrastructure and a skilled construction workforce, must be a priority this year,” concluded Mr Devitt.
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North Queensland needs to do its share of home building
“The improvement in home building activity expected across the nation this year is already underway up and down the Queensland coast,” stated HIA Executive Director, Peter Fry.
ACT continues to languish in national housing rankings
“The Australian Capital Territory remains near the bottom of the national housing league table, staying at seventh place in HIA’s latest Housing Scorecard,” stated HIA ACT & Southern NSW Executive Director, Greg Weller.
Land prices accelerated in 2024
“The median price of residential land sold increased by 2.6 per cent nationally in the final quarter of 2024, to a new record high $369,530,” stated HIA Senior Economist Tom Devitt.
Increase to minimum wages from 1 July
The Fair Work Commission handed down its annual minimum wage decision, awarding a 3.5 per cent increase to the national minimum wage and modern award minimum wages.