Supply solutions yet to materialise in approvals data: HIA

The Housing Industry Association’s (HIA) senior economist Tom Devitt has warned of “wide-ranging” implications for the housing market and the economy as dwelling approvals once again fell among a backdrop of an ongoing housing supply shortage.

Indeed, the housing supply crisis has been a focal point for the Albanese government recently, with the national cabinet agreeing to an updated target of 1.2 million “new, well-located” homes over five years from 1 July 2024.

However, Mr Devitt stated: “In context of the chronic shortage of housing there is a strong focus on improving the supply of new housing, however efforts to improve supply are yet to appear in the approvals data.

“The continued supply-demand imbalance has wide-ranging implications not only for the housing market but for the wider economy.”

The latest Building Approvals data released by the Australian Bureau of Statistics (ABS) has revealed the total number of dwellings approved fell 8.1 per cent in July in seasonally adjusted terms after a 7.9 per cent (revised up from 7.7 per cent) decrease in June.

ABS head of construction statistics Daniel Rossi said the fall in the total number of dwellings approved was influenced by a fall in private sector dwellings (excluding houses), which decreased 15.8 per cent, following a 21.9 per cent fall in June.

Meanwhile, Mr Devitt noted that residential building approvals continued to “tread at very low levels” as a sharper fall in multi-unit approvals of 19.9 per cent led the month’s decline.

Total dwelling approvals fell in most states, with Victoria leading the decline at 18.3 per cent, followed by Queensland (5.5 per cent), Western Australia (5.2 per cent), NSW (4.7 per cent), and South Australia (2.6 per cent).

Tasmania was the only state to record an increase in dwelling approvals, up by 39.5 per cent in seasonally adjusted terms following a drop of 36.6 per cent in June.

Additionally, further ABS data revealed the seasonally adjusted estimate for the value of total buildings approved fell by 16.9 per cent after a rise of 7.2 per cent in June.

The value of total residential building approvals fell 4.4 per cent, encompassed by a 5.1 per cent decrease in new residential building and a 0.4 per cent drop in alterations and additions.

[RELATED: National cabinet agrees to new ‘ambitious’ housing target]