Australia’s major housing markets are set to see a jump in new supply, with Brisbane and Sydney leading the large and mid-sized capitals for dwelling approvals.
With the Australian property market in the grips of a supply crisis, housing approvals surged to an eight-year high, according to recent data.
Analysis from KPMG found that almost 53,000 new homes were approved in the June quarter, the largest jump since 2018.
The data found that the surge was largely driven by an increase in housing approvals in the regions, with 15,760 new dwellings greenlighted outside the capital cities over the quarter.
KPMG senior economist Terry Rawnsley said the number of regional approvals hadn’t been seen since the COVID boom of 2020 and 2021.
“The rise in regional approvals reflects a broad economic shift underway across Australia, with many regions and smaller cities continuing to attract population growth, workers and investment,” Rawnsley said.
“As those communities expand, housing supply will be critical to sustaining that economic momentum.”
Despite the increased number of approved dwellings, Rawnsley said the stock was not being introduced at the right price points to alleviate housing affordability concerns.
“Stronger approval numbers alone will not solve Australia’s housing shortage,” he said.
He said that one of the biggest concerns for addressing housing supply was a shortage of labour, with many capitals struggling to house the additional workers.
“We are in this position where we need more construction workers to help deliver more housing, but we are faced with the situation where we can’t house additional workers in many cities.”
The data showed that Brisbane and Sydney were the strongest performing capitals, with both cities seeing a jump in approvals of more than 14 per cent.
Brisbane saw almost 7,500 new dwellings approved over the quarter, while over 9,000 were greenlit in Sydney.
“Housing approvals in Brisbane and Sydney are accelerating, and most markets are still running above their long-term averages,” Rawnsley said.
“Sydney has been able to sustain an average of 9,000 dwellings for the past seven quarters, so there is momentum in that market that is encouraging.”
In the Victorian capital, approvals fell 12 per cent in the June quarter, balancing out from a 12.9 per cent jump in the previous three months.
Rawnsley said that despite the drop in Melbourne, signs were optimistic across the nation's three major markets.
“While Melbourne took a breather this quarter, the broader trend remains positive.”
“Australia’s two largest housing markets are still generating almost 20,000 approvals between them each quarter, while Brisbane continues to establish itself as one of the nation’s fastest-growing residential development markets.”
Elsewhere, Adelaide saw a five per cent jump in approvals, while Perth eased by 11.9 per cent.
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