New dwelling approvals – whilst up 6% on last year – remain lacklustre.
Some 168,000 new dwellings were approved over the past twelve months, most of which (110,000 or 65% were detached houses) and 58,000 were attached dwellings.
Nearly half (47%) of the new attached dwelling approvals were townhouses, followed by high-rise apartments, mid-rise stock and the n walk-ups.
There were just 27,500 new high-rise apartments approved across Australia for the year ending October 2024.
One of the main reasons why - and despite us being held every second that apartments especially those in new tall towers are the solution to new housing supply and ironically housing affordability – that new apartment supply is in the doldrums is because they cost a hell of a lot to build.
They cost much more than detached houses and townhouses.
And whilst all building costs have risen over the past five years, new apartment builds – regardless of type – have seen a rapid escalation in construction costs.
There are many reasons why, including union-related thuggery, a shortage of skilled labour and limited interest in tier one and two builders.
Also, there aren’t enough of these builders these days to go around.
Moreover, many new apartment projects - sell-off plans - don’t actually get built.
This obviously isn’t good regarding new housing supply plus it pisses off buyers no end and further hinters at future off-plan buying.* It is hard enough selling off-plan as it is without making it even harder.
Yet in theory, we should see more new housing starts in 2025.
This assumes that interest rates fall, as there is a strong relationship – no surprise here – between a change in the cost of money and new housing activity.
But most of this new housing supply will be ‘stick’ construction.
Cheaper builds with short time frames.
Expect more prefabricated stock.
My last chart in this post shows that we need more digs, as the new housing market – again no surprise here – is very undersupplied.
End note
Looking forward we need to build twice as many homes each year than we did last year.
Not 168,000 per annum but something like 300,000 per annum between now and say 2030.
This applies even if we cut migration.
We have a backlog that would make a dead man groan.
