In just a few months, the federal government’s ambitious housing construction targets will come into effect, and Australia will begin trying to build 1.2 million homes in the space of just five years.
But at the same time as the nation is talking about the desperate need to boost supply, the number of housing approvals is falling.
Data from the Australian Bureau of Statistics (ABS) released last week showed approvals fell 1 per cent in January, down to a seasonally adjusted figure of 12,850.
To hit the government’s housing targets, 20,000 homes will need to be built every month from July this year to June 2029.
The January figures followed a much sharper 9.5 per cent drop in December, and pushed the housing approvals trend line down to the lowest level since May 2012.
Professor Nicole Gurran, an urban planning researcher and policy analyst at the University of Sydney, said the lack of new projects comes down to the combination of high interest rates, supply chain issues and worker shortages pushing up material and labour costs respectively.
The first of the trio to put in an application was told they’d need to foot the entire six-figure bill for the upgrade, with a request to split the costs knocked back.
“So of course, that developer went back to the council and said, ‘Well, how many homes do I need to put on there where I don’t tip over the substation upgrade?’ and they said 10,” Wawn says.
“And he said, ‘Okay, fine, I’ll put 10 on’.
The federal government has offered states and territories a share of $3.5 billion to hit their housing targets, but Gurran says it needs to go far further than just incentives.
“It’s nonsensical that we keep on talking about planning regulations as though that’s the only barrier… we’re stuck in these really unproductive conversations when everyone knows if you want to guarantee housing output, government’s got to underwrite it when the market conditions aren’t favourable,” she says.
“You also need government to be in there to make sure that lower and moderate-income earners can afford to buy and rent in those inflated conditions.”
