The ABS has released February 2023 data for building approvals and lending figures.
Master Builders Australia chief economist Shane Garrett says there was a 4.0 per cent increase in the number of new homes approved during February 2023. Detached house building approvals drove the improvement with a gain of 11.3 per cent during the month.
“However, higher density home building approvals retreated again with a 9.5 per cent decline during February. The volume of new approvals on the higher density side is now at its lowest in over a decade.
“The output of new higher density homes has been depressed since before the pandemic.
“Inadequate volumes of new supply are contributing to growing difficulties in our rental market. Rents are currently rising at their fastest pace in over a decade.
“As today’s new report from NHFIC shows, insufficient home-building output will only magnify the challenges around housing affordability.
“With respect to lending figures, all categories of building-related loans to owner-occupiers dipped during February and are much lower than this time last year.
“It is particularly concerning that the volume of first-home buyer loans has fallen so sharply over the past 18 months. First-home buyers now account for less than one-third of home acquisition loans.
“The high cost of creating new homes makes it much more difficult for our industry to deliver at the appropriate price point for first-home buyers.
“Taxes like stamp duty also act as a huge financial impediment for those wishing to own a home for the first time,” said Mr Garrett.
Master Builders Australia CEO Denita Wawn said earlier today: “rising interest rates and declining sales for new home construction is weakening the pipeline of new housing.
“A strong building industry is the foundation of a strong economy. The inextricable ties between construction activity and the broader health of the economy are again on display in the current environment.
“To achieve better housing affordability and keep up with demand, changes need to be made to the way we do things, now and over the long term.
“The government needs to take the necessary steps to ensure interest rates do not need to rise any further and take some of the heavy lifting of our correction off mortgage holders and business owners. From here, there are no easy choices.
“There is no silver bullet; this will take a concerted effort by all levels of government working in collaboration with industry,” said Ms Wawn.