Fewer homes being built after record-breaking year

Fewer homes being built after record-breaking year

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Supply-side bottlenecks have been blamed for a recent downturn in home-building activity.

There were 18,701 building approvals given in August, according to new data from the Australian Bureau of Statistics.

That represented a 5.1 per cent increase on the previous year, but a 6.9 per cent decrease on the previous month.

Private sector house approvals reached 9,765, which was up 3 per cent on the year and 4.9 per cent on the month.

There were also 8,760 approvals for private sector dwellings excluding houses – up 8.6 per cent on the year, but down 11.4 per cent on the month.

Housing Industry Association senior economist Shane Garrett said the pace of home-building activity was slowing in 2015-16 after a record 215,000 housing starts in the last financial year.

“The residential construction sector as a whole is facing strong headwinds in the form of tight land supply conditions in key markets, planning delays, and the unfavourable effects of recent credit restrictions,” he said.

Master Builders Australia chief economist Peter Jones said builders are facing structural problems.

“Supply-side bottlenecks and inefficiencies in making available an adequate supply of serviced land must be addressed if Australia’s housing affordability problem is to be solved, particularly for first home buyers,” he said.

“Master Builders Australia has long called for the implementation of a national affordability agenda across federal, state and local government, and welcomes the recent call by Treasurer Scott Morrison for national leadership of this process.”

[Related: The previous month’s results]

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