With pressure on the Federal Government to encourage the building of more homes to ease price pressures and the historically tight rental market, new data reveals a slowing in residential construction.
The Australian Bureau of Statistics has reported the total number of dwellings approved fell in April.
Daniel Rossi, the ABS head of construction statistics, said: “Approvals for private houses fell 1.6%. Approvals for private sector dwellings (mostly apartments) excluding houses also fell 1.1% in April.”
As experienced real estate agents in your area, we understand that the continuing shortage of homes will continue to bolster prices and benefit current owners, especially sellers.
Looking across the country, total dwelling approvals fell in Tasmania (-16.1%), NSW (-4.5%) and Western Australia (-0.9%). With Victoria flat, rises were recorded in South Australia (13.9%) and Queensland (5%).
Approvals for private sector houses decreased in all mainland states except Western Australia (3.5%).
The value of all approved buildings fell 3.8% in April to $6.16 billion, and the value of all residential buildings fell 3.2% due to the fewer number of properties being approved. The value of alterations and additions rose 0.4%.
In the 2024-25 budget, the Federal Government promised 30,000 new homes would be built through various new housing schemes. Its initiatives include build-to-rent programs and the sale of public land to developers.
While housing availability remains tight, owners will continue to enjoy certain advantages that will help build their wealth. These include:
Shortage: The basic principle of supply and demand usually drives up the value of existing homes, benefiting homeowners.
Buyer motivation: In a period of slow construction, homeowners do not have to fight for buyers when they decide it’s time to sell. Pent-up buyer demand usually leads to better auction results, bigger offers and faster sales.
Negotiating power: A shortage of available homes for sale will give owners the upper hand in negotiations. However, if they plan a subsequent property transaction, the same market dynamics will challenge them.
Stable neighbourhoods: Rapid new construction can disrupt residential areas and diminish values. Usually, owners will benefit from living in an established neighbourhood with a sense of community and consistency.