The new home market is slowing and builders across the country are trying to hold on amid rising prices and labour shortages, but not all will make it.
Conditions are winding down in home building. Official figures published on Thursday showed approvals of new detached houses fell 2.4 per cent in December for the fifth straight month of decline, pulling the yearly total to 115,358 – the lowest since calendar year 2019., along with rising interest rates and escalating costs were cutting approvals numbers, BIS Oxford Economics head of property and building forecasting Timothy Hibbert said.
NAB head of market economics Tapas Strickland said on Thursday there were signs of stabilisation in total building approvals – in part boosted by strong attached dwelling numbers – but that the decline in approvals since 2021 had come as population growth started picking up from its pandemic slump and this was creating longer-term demand for new housing.
“Taken as a ratio, the number of new people per building approval is at 2.3, the highest since 2009, well above the long-run average of 1.5.” “While Australia’s strong expected net migration through this year will limit the total decline in building approvals, falling home prices and rising rates will reduce appetite for new dwelling developments,” Ms Timbrell said.
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