Approvals of new units, townhouses and apartments throughout Australia have fallen to their lowest level in twelve years, new data shows.

And concerns that the slow rate of new building will place further pressure on housing and rental affordability continue to grow.

Released on Thursday, data from the Australian Bureau of Statistics indicates that the seasonally adjusted number of dwellings that were approved for construction throughout Australia contracted by 1.9 percent in February to come in at 12,520.

This represents the second lowest level of dwelling approvals since July 2012.

The result was driven by a 24.9 percent drop in multi-unit residential approvals (units, townhouses and apartments).

Multi-unit approvals are now at their lowest level in seasonally adjusted terms since January 2012.

Meanwhile, approvals in detached housing bounced back from a 9.9 percent slump in January to increase by 10.7 percent in February (seasonally adjusted).

The latest data further underscores concerns that the low volumes of new building work will further exacerbate housing supply and affordability pressures across Australia.

This is particularly the case as Australia is dealing with a current housing shortage and record levels of population growth.

In terms of the housing shortage, data from SQM research shows that the national rental vacancy rate stood at just 1.0 percent in February.

This represents the equal lowest vacancy level since April 2006.

Meanwhile, data released by the Australian Bureau of Statistics last month shows that the population of Australia’s capital cites grew up a record 517,200 people across the 2022/23 financial year.

All this is placing severe pressure on housing and rental affordability.

All up, the latest data from CoreLogic indicates that national median house prices rose by 8.8 percent in the year to March to reach their current value of $772,730.

Since the beginning of COVID, house prices have risen by more than one third (33.4 percent) or $193,608.

Meanwhile average rents have increased from $437 per week in August 2020 to more than $600 per week ($601 per week) as at December last year.

Building industry lobby groups have called on government to do more to unlock greater housing supply.

Master Builders Australia Chief Executive Officer Denita Warn says there is a mismatch between demand for housing and the number of homes which are coming through the approval pipeline.

“When it comes to signing new contracts, the pen is not making it to paper as the investment does not stack up,” Wawn said.

In particularly, Wawn would like to see more action in the Federal Budget to increase the construction workforce supply.

This would be achieved through measures to support industry-led apprenticeships, better targeted skilled migration and reskilling of migrants who are already in Australia.

In addition, Master Builders would like more action from state governments to speed up planning reform, address high developer charges and ensure that sufficient infrastructure is provided to support either new communities or greater density within existing communities.


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