Recall that Prime Minister Anthony Albanese has set a target to build 1.2 million homes over five years, or 240,000 homes a year, starting from 1 July 2024.
Australia has never built more than 223,000 homes in a single 12 month period. Therefore, achieving Albo’s housing target would take a monumental effort.
Thursday’s dwelling approvals data from the Australian Bureau of Statistics (ABS) showed that the nation is way off track from meeting this construction target.
In trend terms, only 12,628 homes were approved for construction in April. This gives an annual run rate of 151,536, which is nearly 89,000 below Albo’s 240,000 annual construction target:
Over the year to April, only 163,493 homes were approved for construction, which is around 76,500 behind Albo’s annual housing target.
The headwinds facing the construction industry are immense.
First, high interest rates have made many projects financially unviable, as well as reduced buyer demand for new homes.
Second, construction costs have soared by between 30% and 40%, which has also made new projects unviable.
Third, home builders are going insolvent at an alarming rate, with the number of construction firms entering external administration rising 150% over the past two years:
Finally, home builders are competing for workers with state government big build infrastructure projects.
In 2022, after the Albanese government affirmed that it would ramped-up the migration intake, journalist Michelle Grattan asked Treasurer Jim Chalmers where the new migrants will live?
GRATTAN: But of course, you’ve got a time problem here, you need the houses now, if migrants are coming in more numbers, and yet, if you’re talking about investment, that takes a while.
CHALMERS: We’ve got to get cracking then.
Instead of getting cracking, the Albanese government has ramped housing demand to record highs in a supply restricted market.
And the impacts on Australian renters has been devastating.
