The Property Council of Australia says the latest ABS Building Activity data for the December quarter shows housing activity easing, reinforcing the need for governments to act decisively to lift productivity and remove barriers to delivery if Australia is to meet its housing targets.
ABS data for the December quarter shows total dwelling commencements rose 8.0 per cent to 53,567 dwellings, driven by growth in other residential construction. Over the same period, total dwelling completions fell 1.7 per cent to 43,536 dwellings and were 3.9 per cent lower than a year earlier.
Property Council's Executive Director Policy and Advocacy, Matthew Kandelaars, said the data reflects a system that is approving and starting more projects, but struggling to get homes built at the pace required to meet National Housing Accord targets.
"With no state currently on track to meet its housing target, stronger commencements alone will not close the supply gap if fewer homes are being completed."
Mr Kandelaars said that while the National Housing Accord targets have seen improvements to planning approvals, the challenge now sits between approvals and commencements, and then completions.
"The constraint on housing supply sits after planning approval, with post-permit processes, lack of housing-enabling infrastructure, slow coordination with utilities and rising costs all reducing the rate at which approved projects are completed," he said.
The Property Council said the delivery challenge is becoming more acute as construction costs rise again and global uncertainty weighs on confidence across the sector. It warned the full impact of the conflict in the Middle East is not yet reflected in the ABS data and is expected to become clearer in the middle of the year as these cost pressures flow through the construction system.
"If we do not improve the conditions to get approved projects built, rising costs will make the task even harder in the months ahead," Mr Kandelaars said.
"At a time of extreme uncertainty, we need a laser-like focus on maintaining investment confidence, clearing delivery constraints and boosting productivity."
"Global capital is actively seeking long-term exposure to housing markets around the world, but it is increasingly discriminating between markets that merely approve housing and markets that can deliver it consistently at scale."
