Following years of booming demand, residential building work is now likely to ease back until 2026, Master Builders Australia (MBA) is predicting.
Even though about 200,000 new homes need to be built each year to accommodate long-term population growth, that target is unlikely to be reached over the next few years, according to MBA’s forecasts. Activity on the medium-high density side of the market is likely to be particularly slow.
This follows a jump during the pandemic due to government incentives, which saw building starts increase by 4.3% to 181,760 in 2020 and by a whopping 26.4% to 229,790 in 2021. However, through 2022 this number had already eased back to 192,060.
According to Master Builders Australia Chief Executive Denita Wawn, the high demand has been significantly reduced through current economic conditions of interest rates hikes, inflation and continued shortage of workers and materials.
“Our members continue to be frustrated with lengthy delays in approvals for land title, building applications, and occupation certificates.
“Shortage of land in the right places, high developer charges, and inflexible planning laws also restrict opportunities to meet the housing needs of our future”, Wawn said, adding that these long-term supply challenges are the responsibility of state and territory governments.
MBA is predicting that total dwelling starts will continue falling, by 1.3% this year and 7.7% in 2024, before recovering that loss the following year and increasing by a satisfying 11.9% to 210,850 in 2026.
