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{{propApi.successMessage}} {{region}} Change locationNew home building remains at decade lows
New home building remains at decade lows
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The ABS today released its building activity data for the December quarter 2024. 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.
“Home building is currently at the bottom of a cycle and is losing skilled workers to other industry sectors, which impedes future building capacity,” added Mr Reardon.
“Australia has consistently built more than 200,000 homes each year and will need to exceed 250,000 annually to meet the Australian Government’s 1.2 million homes target.
“Despite the low volume of new homes commencing construction, demand for skilled tradespeople remains high, just not in the new home building sector. The exceptionally low rate of unemployment, and their rare skills, see them in high demand from other industry sectors.
“The more workers that are lost from the home building sector in this cycle, the harder and more expensive it will be to increase that capacity, as interest rates fall and activity picks up.
“The exceptionally low level of unemployment in Australia is a double-edged sword for the industry as it creates demand for new homes and at the same time, leads to higher labour costs to build a new home.
“This week the major parties have announced measures aimed at building more new homes.
“In the short term, the only measure that an incoming Australian Government can do to increase the supply of new homes is to offset the cost of taxes fees and charges, by providing financial support for those that build a new home.
“Whether this is done through removing the imposts, such as Lenders Mortgage Insurance or removing first home buyers from the established market and incentivising them to build a new home, can increase the supply of new homes.
“These are the ‘easy-good’ solutions to the housing shortage.
“This doesn’t negate the need for the ‘hard-smart’ policies tackling land supply, infrastructure costs, planning regimes and delays to home building and reform of taxes on new homes.
“An investment in infrastructure, or tax reform or reducing delays, wont impact on the price or supply of housing within an election cycle, but if they are sustained over a decade, they will begin to ease the cost of a new home.
“This should not be an excuse for politicians to renege on their responsibility to address housing affordability by arresting the high cost of delivering new land and rising taxes on housing.
“HIA forecasts that only 983,530 new homes will commence construction over that five-year period, unless meaningful changes to remove the barriers to supply are made,” concluded Mr Reardon.
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