Approvals for apartments at worst level since 2011
Three housing industry bodies have voiced concerns about approvals for apartments and units going in the wrong direction.
AUSTRALIA’S housing crisis is being dragged out because of a slowdown in the number of approvals for higher density units, analysts claim.
Housing industry groups voiced their concerns after the latest Australian Bureau of Statistic data showed approvals for apartments and units was going in the wrong direction.
Master Builders Australia chief economist Shane Garrett said: “In 2024, higher density approvals dropped back by 1.3 per cent, meaning 2024 was the worst year for higher density approvals since 2011.
“The insufficient flow of new home building on the higher density side of the market is one of the main sources of rental price inflation.
“Latest data indicate that rents rose by 6.2 per cent over the year to December 2024 – one of the biggest sources of inflationary pressure.”
Property Council Group Executive Policy and Advocacy Matthew Kandelaars also highlighted the issue.
“Despite their key role in easing the housing crisis, we have seen approval rates for apartments fall in 2024,” he said.
“Apartments take nearly three years to go from approval to construction and have volatile approval patterns.
“We must consider the factors impacting project feasibility that stop approvals from progressing to commencement, and then completion.
“We need action to tackle rising construction costs, labour shortages, planning delays, slow approvals and shifting state property taxes that punish foreign investment if we want to arrest the decline.”
Housing Industry Association economist Tom Devitt also focused on the problem.
“Higher density housing development is running at its lowest levels in over a decade,” he said.
“A significant pick-up in multi-unit starts is urgently required to meet the housing demand of recently elevated net overseas migration.
“This market segment is crucial to making inroads on housing affordability and improving home ownership rates for first home buyers.”
“At a minimum, it is necessary for the volume of multi-unit starts to double from current levels to contribute sufficiently to the 240,000 homes per year needed to achieve the Government’s housing target.
