The Australian Bureau of Statistics (ABS) has confirmed today the need for governments to focus on tackling supply-side challenges in the building and construction industry.
The release of the monthly Consumer Price Index (CPI), building approvals, and construction work done paints a clear picture of the flow on effect if inflationary impacts are not appropriately tackled says Master Builders Australia CEO Denita Wawn.
"Difficulties with the supply of materials and labour has been placing pressure on new home building activity. These unfavourable cost conditions helped push new dwelling purchase prices up by 20.4 per cent over the year to October 2022.
"The large rise in new home costs is one of the main reasons why the inflation rate has risen across the economy.
"There was a 2.2 per cent increase in the total volume of construction work done during the September 2022 quarter. This was largely driven by the solid increase in civil/engineering construction (3.4 per cent) over the quarter. However, there were also gains for both residential (1.3 per cent) and non-residential building (1.1 per cent) over the same period.
"Looking ahead, newly released approvals data indicate that home building activity will move lower over coming months.
"There was a 6 per cent drop in the total number of new home building approvals during October 2022 and a particularly sharp decline (-11.3 per cent) in the number of medium/high density dwellings.
"Governments at a state and territory level must double-down on their efforts to address issues that continue to frustrate the industry like lengthy delays in approvals for land title, development and building applications, and occupation certificates.
"Government must be strategic when it comes to significant policy changes, like the proposed IR Bill, and carefully consider its impacts against a challenging economic backdrop," said Ms Wawn.
