Building approvals for new dwellings are on a downward trajectory, and industry experts are calling for practical action to ensure growth and productivity for the construction industry.
New data from the Australian Bureau of Statistics (ABS) shows Queensland’s dwelling approvals fell a whopping 14.6% in November; this has been attributed to a sharp decline in unit approvals, which saw a monthly change of -1.7%.
In the year to November, Queensland saw an 8.7% decline in new dwelling approvals.
Master Builders responds
Master Builders Queensland (MBA) CEO, Paul Bidwell, called the continuing decline in approvals statewide ‘alarming’ and urged immediate action.
“Queensland is already in the grips of a housing crisis – and the recent severe weather events in Far North Queensland and parts of the state’s South East have only added to the workload of our under-pressure building and construction industry,” said Bidwell.
“There is no doubt that the storm damage has added pressure to an already stretched workforce, and we expect that some of the property owners affected may be forced to wait around two years for their work to commence.”
Paul Bidwell, Master Builders
“This estimate is based on the length of time it took for work to commence in Townsville after the most recent flooding there a couple of years back, and the Halloween storms that lashed Springfield west of Brisbane in 2020.”
However, Bidwell said the underlying issue is the high cost of building new homes, both units and dwellings.
“That’s down to a combination of stubbornly high borrowing costs and still increasing costs of construction dragging down the demand for building or buying new homes,” he said.
“Homeowners are forced out of the market and developers can’t make unit projects stack up.”
However, Bidwell said that aside from the damage wrought by recent weather events, Queensland’s pipeline is stuffed, noting the massive program of health, Olympics and Paralympics, water infrastructure, and renewable energy projects that will continue to pressure supply chains and exert upward pressure on prices.
Recommendations to slice the red tape
Bidwell said streamlining the planning system – increasing the supply of residential lots and making the approval and construction of medium density unit projects faster and easier, would be one way to cut through the red tape.
“Reducing unnecessary red tape for builders will help reduce costs – for example, project trust accounts which do not work, excessive requirements of the QBCC, and changes to the National Construction Code where a net benefit to consumers hasn’t been identified,” he said.
As far as improving productivity across the industry, Bidwell said Master Builders has called on the Queensland Government to assist small business in improving their software.
“We have also called on the Queensland Government to establish a ‘Construction Innovation Centre’ in Queensland to support residential builders to transition to better building practices,” he said.
“Transforming construction to incorporate prefabricated building components would reduce construction time on site, which will reduce the cost.
“We’re hopeful that the state government’s decision last November to double the first homeowner grant will stimulate demand for new homes.”