Dwelling approvals fall 6.4% in October according to new ABS data

ABC NEWS (Australia)

New data from the Australian bureau of statistics shows new home dwelling approvals dropped by more than 6 per cent in October. That's despite the huge national focus on getting more homes built to ease the housing crisis.

Transcript

00:00Well, look, it shows that the industry is struggling to get houses out of the ground.

00:05So it was a 6.4% drop in October and about a 1.2% drop over the year to October.

00:12And so how does this reflect on the Government's target of getting 1.2 million homes built

00:18by 2030?

00:19Where does that stand now?

00:21Well, look, it shows there's a growing gap between policy, ambition and reality.

00:25Last year, the first year of the Housing Accord target, we fell about 60,000 short.

00:31And with the trend in the building approvals numbers, it looks like we're likely to fall

00:35short again this year.

00:37So this really is a key policy focus for Anthony Albanese.

00:42It's one of his key promises.

00:44What needs to happen on the policy front to get this moving?

00:49Well, look, it's all about supply, supply, supply.

00:53And for the industry, that means boosting capacity in the supply chain.

00:57It's about having the boots on the ground.

00:59But it's also having the settings in the industry to get these projects out of the ground.

01:04So one of the most concerning things about the data that was released yesterday is that

01:07the biggest fall was in high density or apartment construction, which fell 12% over the month.

01:13The industry, it's hard to get those projects out of the ground at the moment.

01:18They're just not stacking up for the builders.

01:20And so what needs to happen to get those settings right?

01:24Well, look, I think it's about making sure that we've got capacity in the supply chain.

01:29So we need greater investment in skills and workers.

01:32We need the boots on the ground to actually build those homes.

01:34But can that happen quickly, suddenly getting tradies where we haven't got enough at the moment?

01:41Well, look, I think it can.

01:42And, you know, the government is making some efforts.

01:44We do have to give them some credit where it is due, you know, recently announcing that

01:49they will extend the incentives for apprentices in construction trades, and that's very welcomed.

01:55But also it's about getting, you know, more workers into the industry through attraction,

01:59through migration, and also through different parts of the economy that may not traditionally

02:05have been a source for construction workers.

02:07And what about red tape in the process?

02:09Look, absolutely.

02:10And it's still taking too long to get projects out of the ground, and particularly for those

02:16high-density projects.

02:19Here in New South Wales, you know, the average time it takes to get an apartment project from

02:24planning to completion is over three years.

02:26So the New South Wales government has introduced some recent planning reforms which are very welcomed

02:32and were supported by industry, but they'll take some time as well to show up in the completions

02:37data.

02:38Are you surprised that with all we've heard about this over the past four years or so, that

02:45more progress isn't being made already?

02:47Well, look, I think the challenge is that the underlying dynamics in the industry are causing

02:55the downturn in numbers.

02:57So we don't have a shortage of demand, you know, prices are rising.

03:01People want to buy houses, it's a good investment.

03:05But it's about the feasibility of those projects.

03:09We've had price increases into the construction industry of over 40 per cent since 2019.

03:16Borrowing costs are now up, insurance costs are now up, and that just challenges the feasibility

03:20of those projects.

03:21So can you see any real chance of the government getting to this key target of 1.2 million homes

03:28by 2030?

03:28Well, look, in order to reach those targets from here, we would have to hit a record number

03:34of houses each year for the next four years, over 250,000.

03:38Now, the most number of houses we've built in Australia in a given year was 234,000 in 2016.

03:45So that would be a record run.

03:48And really what we'd want to see is the approvals numbers starting to really increase now.

03:53We're over 18 months into the housing accord target, you know, and those approvals numbers

03:58growing quickly and then turning quickly into commencements.

04:02That's something that we're not currently seeing.

04:03We'll see each other.

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