The Albanese government’s target of building 1.2 million homes over five years, or 20,000 homes a month, has drifted further out of reach, with May’s dwelling approvals data from the Australian Bureau of Statistics (ABS) missing by a wide margin.
In trend terms, only 13,500 dwellings were approved for construction in May, which is 6,500 (32.5%) below the run rate required to meet Labor’s housing target:
In the year to May, only 163,800 homes were approved for construction, 76,200 (32%) below Labor’s 240,000 housing target:
The official start data for Labor’s housing target commenced on 1 July, and based on the above data on approvals, Australia will fall way behind in the first year.
It is important to note that the record number of completions in a 12-month period was 223,600 in 2017, which was 7% below Labor’s annual target.
This record level of construction was achieved with an official cash rate of only 1.50%, versus 4.35% currently, and construction costs that were around 40% lower than currently:
Builders in 2017 also were not competing fiercely for workers with state government ‘big build’ infrastructure projects.
The reality of the situation is that Australia has zero chance of meeting Labor’s 1.2 million housing construction target. We will miss by a very wide data.
Therefore, the only realistic solution to Australia’s housing shortage is to slash immigration to a level that is commensurate with the nation’s ability to build housing and infrastructure.
Otherwise, Australia’s housing shortage will become permanent, driving up rental stress and homelessness.
