Dwelling Unit Approvals in Australia Increased by 5.5% in May

In May, Australia saw a 5.5 percent increase in approved dwelling units compared to the previous month, according to data from the Australian Bureau of Statistics (ABS). However, this is still significantly below the federal government’s target.

The ABS reported that total approved dwelling units increased in most states, with Western Australia leading the growth at 19.6 percent, followed by Victoria at 8.9 percent, and Queensland at 6.3 percent. South Australia witnessed a 4.1 percent growth, while Tasmania climbed by 3.8 percent.

During the same period, the Northern Territory and Australian Capital Territory saw no change in approvals.

On a year-on-year basis, Australia experienced an 8.5 percent decrease in total approved dwelling units. Private sector houses declined by 12 percent, while private sector dwellings excluding houses plummeted by 31.7 percent.

“There have been 163,760 total dwelling approvals in the most recent 12 months up to May 2024,” stated Tim Reardon, Chief Economist at the Housing Industry Association (HIA). “This falls well short of the 240,000 new homes required annually from July 1, 2024, to meet the national cabinet’s target. The low approval numbers indicate a slow start to building 1.2 million homes over the next five years.”

Reardon emphasized the need to address tax, planning, land, and regulatory obstacles to increase housing supply in Australia.

Similarly, Denita Wawn, CEO of Masters Builders Australia, stated that the country is not adequately prepared to achieve its goal of building 1.2 million homes within five years.

“While there has been some progress at state and federal levels, especially in the housing sector, it has not been fast enough or has been hindered by other policies. Essentially, investing in new home construction is not feasible without further reforms,” Ms. Wawn commented.

The Albanese government previously allocated $32 billion to new housing initiatives through its Homes for Australia plan, aiming to construct more houses nationwide from July 1 onwards.

This initiative includes the creation of a $10 billion Housing Australia Future Fund to build 30,000 social and affordable rental homes, a $2 billion Social Housing Accelerator program to develop around 4,000 new social homes, and a $3 billion New Homes Bonus to encourage states and territories to increase home construction.

Additionally, the plan includes a $5.5 billion Help to Buy scheme to assist more Australians in purchasing their own homes, $2.7 billion to boost Commonwealth Rent Assistance by 15 percent, and $2 billion in financing for additional social and affordable rental homes.

The government also earmarked $90.6 million to enhance the construction workforce, offering 20,000 new fee-free training positions.