Further drop in building approvals amid more challenging backdrop
There was a further drop in the number of new homes approved for building across Australia during April 2022 according to the latest ABS data.
The figures indicate that there was a 2.4% drop in the total number of new homes receiving building approval during the month. Compared with a year earlier, the volume of approvals is down by some 32.4%.
Master Builders Australia chief executive Denita Wawn says that the sharp decline in approvals over the past year is the result of a number of factors: “These include the phasing out of the HomeBuilder scheme as well as the emergence of challenges in the business environment.
“The cost of building materials is growing at its fastest rate in over 40 years while delays and shortages with respect to both labour and products continue to obstruct building activity.”
She adds that the recent ABS figures to indicate that demand for new detached house building is holding up reasonably well.
“There was a 0.5% increase in approvals for detached houses during April and the level of activity is still a bit higher than it was immediately before the start of the pandemic,” she explains.
“In contrast, approvals for medium and high-density homes are much lower than their pre-pandemic levels. April saw a 6.1% drop in approvals in this category. We do expect demand for higher density homes to recover once inward migration to Australia moves closer to where it was before the pandemic.”
Denita says that for the building and construction industry, the most immediate challenge is the supply of building products and the people needed to carry out the work. She adds that Master Builders Australia is working with the new federal government to assist with finding and delivering solutions.