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{{propApi.successMessage}} {{region}} Change locationBuilding Approvals in the ACT Continue to Languish
Building Approvals in the ACT Continue to Languish
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“While lower interest rates have provided a modest boost to home building activity in other parts of the country, in the ACT they appear to have only halted the decline rather than sparked a recovery,” said HIA Executive Director ACT & Southern NSW, Geordan Murray.
“The latest data shows that approvals in the ACT continue to languish, and that is deeply concerning.
“New home completions have outnumbered the number of new builds starting, so there are fewer homes under construction.
“The number of homes under construction is one of the best barometers of the health of the building industry.
“It tells us how busy the trades workforce is, the number of apprenticeship jobs that are likely to be created, the volume of building materials flowing through the supply chain, and it’s a leading indicator for household goods and homewares retailers. When that number falls, the whole housing ecosystem feels it.
“The number of homes under construction in the ACT fell to just 5,225 in the June quarter — the lowest level recorded since 2018.
“With approvals remaining soft through the September quarter, it’s likely that the next data update will confirm that the number of homes under construction has fallen even further.
“The ACT Government has committed to delivering 30,000 new homes by 2030 to help ease housing affordability pressures. However, current activity levels suggest that meeting this commitment is slipping out of reach.
“While the government has announced welcome planning reforms to facilitate growth in the ‘missing middle’, and proposed zoning changes to facilitate more apartment developments, there remains an unwillingness to confront the core issue — it’s simply too expensive to build new homes in the ACT.
“Land prices are so high that only the wealthiest home buyers can afford to build, which forces more households back into the established market. That just drives up prices further.
“The Suburban Land Agency, as the ACT’s major supplier of new residential land, has a key role to play in improving affordability by moderating land prices and increasing release volumes.
“The other elephant in the room is Lease Variation Charges. It’s a significant impost that undermines the financial viability of many residential projects and discourages investment in new housing.
“If we want to get more homes built, the ACT Government needs to take a hard look at the cost structures that are driving up the price of new housing.
“Without action, we risk falling even further behind on the housing supply target — and that means affordability will only get worse,” concluded Mr Murray.
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