Record-breaking building approvals to aid housing affordability
Building approvals continue their unbroken upward trajectory, hitting new records over the past 12 months, according to the latest data released 1 July from the ABS.
Despite a small drop in approvals in May in trend terms, year-to-date seasonally adjusted data sets a new high water mark for dwelling approvals.
Nationally, the latest ABS Building Approvals data shows continued growth, with 218,442 new dwellings approved in seasonally adjusted terms for the 12 months to May 2015, up from 192,561 approvals for the 12-month period to May 2014.
Building approvals increased 2 per cent on the April 2015 figure and rose 13 per cent year-on-year.
“Today’s result is the best possible news for combating the challenge of housing affordability,” said Nick Proud, Executive Director Residential for the Property Council of Australia.
“The only meaningful way to take the pressure off prices is to increase new housing supply and today’s data shows Australia is continuing a significant run of residential approvals.
“In just a few short years approvals have increased substantially – today’s level is an increase of 70,000 on the 12-month period to May 2012 when nationally we recorded 147,727 building approvals.
“Nowhere is the rise more clearly illustrated than in New South Wales where building approvals have risen from 34,0 for the year to May 2012 to 57,088 in seasonal terms for the year to May 2015.
“Housing affordability will improve in places such as New South Wales only when dwelling completions pick up from long run levels of around 28-30,000 completions per year to match the current annual building approval levels.
“It is critical we sustain this level of activity for the foreseeable future, and that means doing away with punitive, inefficient taxes like stamp duty that act as a handbrake on supply growth and are a barrier to home ownership.
“Ironically today marks the 1th anniversary of the introduction of stamp duty in New South Wales. This tax is a relic of our colonial past that has spiralled out of control, increasing by almost 800 per cent in the past two decades and it’s time it was relegated to the history books.
“Australia needs to deliver new housing supply at around the 190,000 dwellings mark and it will take at least five years of building approvals at or above the 200,000 mark to meet housing formation and supply deficits that have built up over the past decade.
“Housing construction is one of the few bright spots in Australia’s economy, creating jobs and economic growth. Tax and planning reform are vital if we are to maintain this strength.”
Media contact: Fiona Benson | M 0407 294 620 E [email protected]