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Building figures a warning for housing affordability

ABS figures released yesterday show building activity has declined for both new commencement and completions in Victoria over the last year.

According to the data, there has been a 17.8 per cent statewide decrease in commencements, with completion rates also dropping by 1.4 per cent.

Property Council Victorian Executive Director, Cressida Wall, said the drop off in building activity is concerning in the face on ongoing population growth, and the return of buyers to the market.

“The State Government needs to urgently address the slowdown in building activity if we are to avoid a new affordability crisis. The commencement and completion figures released today show we are heading towards a housing supply shortage and more needs to be done to stimulate the new development required to meet population demand,” said Ms Wall.

“Currently, red tape blockages are holding up a number of projects– adding time and cost to the delivery of new housing stock.”

With buyers returning to the market, and auction clearance rates up by 18 per cent on last year, immediate stimulus is required to ensure there is sufficient new stock to meet market demand.

“Beyond improving planning processes, the Government also needs to address investment into the residential sector,” said Ms Wall.

“Addressing the tax burden on new development and reducing onerous taxation on international investors will help drive new development, which ultimately supports jobs and housing affordability."

“Reform is essential to ensuring we have the homes required to meet the needs of Victoria’s growing population.”

Media contact: Emily Young | M 0447 020 328 | E eyoung@propertycouncil.com.au