Slump in apartment approvals drags home building down again

FEDERAL government plans to build 1.2 million homes by 2029 continue to be plagued by a lack of building approvals.

The total number of dwellings approved fell 6 per cent in August to 14,744 homes, according to the Australian Bureau of Statistics (ABS).

Around 20,00 are needed each month if the government is to hit its ambitious target.

Daniel Rossi, ABS head of construction statistics, said: “The drop in total dwellings was driven by an 8.1 per cent fall in private dwellings excluding houses.”

Semi-detached, row or terrace houses, townhouses and apartments, which come under this category, also fell in July – by 25.8 per cent.

The fall in apartment approvals had the biggest impact, dropping by 33.4 per cent to just 2,704.

“This was the second lowest result in the past 12 months,” the ABS noted.

“Only 527 new apartments approved in New South Wales and 342 new apartments approved in Victoria.

“Townhouse approvals were also down in August, falling 19.1 per cent (to 2,424 dwellings).

Private sector house approvals fell 2.6 per cent (to 9,027 dwellings), after rising 1.3 per cent in July. The result is 3.5 per cent lower than one year ago.

“The fall in private sector houses in August was driven by the two largest states, Victoria and New South Wales, which were down 8.3 per cent and 6.2 per cent, respectively,” Mr Rossi said. 

“In contrast, Queensland rose 2.9 per cent and Western Australia rose 1.7 per cent.” 

Master Builders Australia Chief Economist Shane Garrett said: “The total number of dwellings approved fell by 6.0 per cent in August. This was driven by an 10.6 per cent drop in approvals for apartments and townhouses.  

“Detached house approvals also declined by 2.9 per cent in August, and are now 3.8 per cent lower when compared to the same month last year. 

“This trend is deeply concerning because approvals are the pipeline for tomorrow’s housing supply. With apartment approvals in particular now at some of the lowest levels seen over the past 12 months, the industry faces serious challenges meeting demand. 

“The only way out of the housing crisis is to build more higher density housing. Apartments and townhouses must make up at least half of all residential construction if we are to meet demand and give Australians more affordable options in the places they want to live.” 

• Look out for Housing Minister Clare O’Neil’s interview in Australian Conveyancer – out next week – where she tells how she is walking the walk when it comes to dealing with Australia’s housing woes.