New home building is still too low despite an uptick in higher density projects, Master Builders Australia warned this week.
Responding to data released by the Australian Bureau of Statistics, Master Builders Australia chief economist Shane Garrett said detached house building approvals slid by 1.9% during November.
“(Today’s) figures mean that just 945,554 new homes have been approved across Australia over the past five years”, Garrett noted.
Master Builders has forecast that 2023-24 will see around 170,100 new homes built, well below the 240,000 needed per year to meet the 1.2 million housing accord targets.
“However, there was a modest 1.6% increase in the overall number of new home building approvals during November 2023 thanks to a 7.2% gain in higher density approvals”, he added.
Garrett believes that more higher density building will help alleviate some of the pressure in the rental market which has seen big inflationary impacts in the economy, yet there are still plenty of potential roadblocks.
“Labour market shortages, lack of shovel-ready development, planning delays and interest rate rises continue to be the biggest impediments to home building”, he concluded.
