Home building approvals increase from decade-low levels

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“Building approvals for new homes increased by 5.5 per cent in the month of May 2024,” stated HIA Chief Economist Tim Reardon.

The Australian Bureau of Statistics today released its monthly building approvals data for May 2024 for detached houses and multi-units covering all states and territories.

“This leaves approvals in the three months to May 2024 down by 1.5 per cent compared to the same period in the previous year,” added Mr Reardon.

“There were 14,180 residential building approvals in the month of May, with 9,260 detached house approvals and 4,920 multi-units.

“Detached house approvals increased by 1.3 per cent in May 2024 and have been slowly strengthening in recent months.

“Detached approvals in the three months to May 2024 are up by 10.0 per cent compared to the same period in the previous year.

“Multi-unit approvals increased by 14.3 per cent in May from very low levels in recent months. Over the three months to May 2024, multi-unit approvals remain 19.1 per cent lower than in the same period in the previous year.

“There have been 163,760 total dwelling approvals over the most recent 12 months to May 2024.

“This is well below the 240,000 new homes needed each year from 1 July 2024 to achieve National Cabinet’s goal.

“The low approvals numbers indicate a slow start to building 1.2 million homes over the next five years.

“Increasing the number of homes built will be necessary to address longstanding housing shortages.

“Addressing tax, planning, land and regulatory constraints will be necessary to increasing the supply of homes in Australia,” concluded Mr Reardon.

In seasonally adjusted terms, approvals in the three months to May 2024 saw an increase of 51.1 per cent in Western Australia compared to the same time in the previous year. This was followed by Victoria (+10.0 per cent). The other jurisdictions recorded declines over the same period, led by the New South Wales (-21.6 per cent), followed by South Australia (-6.0 per cent) and Queensland (-4.8 per cent).

In original terms, the Australian Capital Territory recorded a 33.4 per cent increase in approvals in the three months to May 2024 compared to the previous year. Approvals over the same period fell in the Northern Territory (-34.3 per cent) and in Tasmania (-16.3 per cent).

Master Builders transcript: Interview with Mark Allen and Jimmy Bartel, 3AW Melbourne

Event: Interview with Mark Allen and Jimmy Bartel, 3AW Melbourne

Date: 3 July 2024, 8.50am AEST
Speakers: Denita Wawn, CEO Master Builders Australia
Topics: trade shortages; increasing housing supply


Jimmy Bartel, 3AW Melbourne: Mark, we’ve been talking a lot in the last week or so about the housing crisis. How are we going to deal with it? You know how many houses we’re going to build? And they’re all sort of linking together these stories, so we’ve got targets, we have population growth, all sorts of stuff. Denita Wawn, CEO of Master Builders Australia joins us on the line, because there’s been a dramatic decrease in tradies out there. Morning, Denita!

Denita Wawn, CEO Master Builders Australia: Good morning.


Jimmy: We’ve got big goals, big ambitions. But we’ve got no one to build. What are we going to do about this?


Denita: Yeah, there’s a few roadblocks in place at the moment. We’re desperately wanting to build, but not enough people to build, to undertake that task and we’ve seen a decline in apprentice commencement and that is not good at all, given that we need, according to build skills, Australia 90,000 additional tradies this year alone to meet that 1.2 million home target nationally over five years. And it’s really concerning, we had this problem pre-COVID, it was pulled away a little bit with incentives over COVID, but now is massive decline. And we really need to encourage all people to consider a job in the trades, there’s a lot of opportunities for a long period of time.


Jimmy: So, Denita, obviously, you’ve had your eye on this for quite some time. Has it rippled through your industry in the last 12 months, or is this something that you’ve been, you know, maybe aware of that could happen down the track?


Denita: It’s been something that, to be honest, has been going on for the last 10 years. But it’s been exacerbated over the last couple of years. We’ve had ongoing declines in people undertaking apprentices. Decades ago, we made a decision as a country, rightly or wrongly, to promote people into university as opposed to trade. That is now feeling the full effect of people are retiring, looking at alternative employment, and simply not enough people looking at trade as a career. We all know, it’s a fantastic career if you choose to take it up. And of course, we haven’t been good as an industry in encouraging women into the industry, so we’ve been a bit blind to half the working population. So that also is something that we’ve worked on over the last couple of years and madly trying to make up time.


Jimmy: That’s one solution. Any other solutions that we could put into place in the short term to get more tradies?


Denita: Well, we’ve made a number of suggestions to the government. They’ve undertaken an apprentice incentive review, so kudos to them for doing that federally. We’ve said a big answer we think is a better use of group training organisations, particularly those that are run by not-for-profit organisations. That’s where the employer is actually the group training organisation, and they look after the apprentices, they place them into businesses, it’s more expensive, but they get a much, much better outcome. So, we’re looking for an incentive to support those group training organisations to encourage more people into the industry, because they’ll feel more protected through that GTO possibly, as opposed to small businesses really finding it tough to look after employing an apprentice.


Jimmy: So where should prospective tradies be pointed Denita? I mean of all the trades which ones do you need the most?


Denita: Well, all of them, I think is the simple answer. Jobs and Skills Australia have said that we’ve got a shortage in every single trade. So certainly, recommend people going onto career sites. Women, if you’re wanting to look, there’s a Women Building Australia site that has a career part on that site. Look at what interests you, look at what you think you’ll, you enjoy, and then go on to the myriad of apprentice sites available, including through Careers Australia.


Jimmy: Thanks very much for your time. Denita Wawn, CEO of Master Builders Australia.

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