The forward-looking data paints a dire picture of Australian housing construction.
The latest dwelling approvals data from the Australian Bureau of Statistics (ABS) revealed that only 164,200 homes were approved for construction in the year to October, which is around 76,000 below the Albanese government’s target to build 1.2 million homes over five years, or 240,000 a year:
Separate ABS data on loans for the purchase or construction of a new home remained at historical lows in October:
According to figures provided to The AFR by the ABS, an estimated 89,300 people were retrenched across the economy during each quarter between November 2022 and August 2023.
This compares with a quarterly average of 87,300 in the previous corresponding period.
The construction industry recorded the most redundancies over the year to August, with an average of 11,900 retrenchments during each quarter.
Housing Industry Association chief economist Tim Reardon said employment in residential construction was contracting as the number of homes under construction was falling:
“That headline [drop in the construction industry’s retrenchment rate] hides the fact that employment in residential home building has been contracting, while other sectors have been absorbing these workers”, he said
Meanwhile, insolvencies across the construction sector has surged to decade highs, with the rate of insolvencies for construction sector businesses running roughly double that of other sectors:
The Albanese government’s housing target has never been achieved before.
The highest single year of dwelling completions was 223,000 in 2017. This occurred alongside low interest rates, lower materials prices, and relatively abundant labour availability, which is the polar opposite of current conditions.
As shown above, current dwelling approval rates are running 76,000 below the Albanese government’s housing target and are likely to fall further.
Labor’s 1.2 million home target is destined to fail at the same time that the government is importing record numbers of people in need of accommodation.
The inevitable consequences will be worsening housing shortages, rising rents, overcrowding, and homelessness.
