The Australian building industry has voiced concerns with building approvals hitting their lowest levels since April 2012.

Master Builders Australia (MBA) acting chief executive officer Shaun Schmitke says the low approvals are impacting Australia’s ability to meet its housing targets.

“According to the Australian Bureau of Statistics (ABS), new home building approvals sank by 8.1% over the month with a total of 11,594 dwellings approved in seasonally adjusted terms,” Shaun says.

“The reverses in new home building approvals come in the aftermath of 12 months of rising interest rates and inflation at its highest in over 30 years. The data reflects the cautious approach being taken by developers and consumers in the face of economic uncertainty and high building costs.”

Shaun notes the biggest drops in approvals were in higher density home building approvals and home renovations falling by 16.9% and 26.6% respectively.

“Although demand for medium and high-density housing is surging, the pipeline of new stock is rapidly diminishing,” he says.

“The fall in new builds will exacerbate pressures in the rental market at the worst possible time with media reports showing the portion of income needed to pay rent lifting to the highest level since June 2014.”

Shaun believes the upcoming planning ministers meeting provides an opportunity to address these challenges.

“To ensure we continue to supply enough homes to house all Australians, governments need to look at what impact their regulations and policies have on the cost of building homes and on the cost of building social infrastructure.

“Builders recognise the importance of a healthy and vibrant building and construction sector in supporting economic growth and addressing the housing needs of a growing population.”