Australian National Review – Australian Rental Crisis: Number Of New Properties Being Built Crashes In NSW, VIC, ACT, WA, And NT

Australian Rental Crisis: Number of New Properties Being Built Crashes in NSW, VIC, ACT, WA, and NT

By Peter Vincent

Australia’s rental crisis could be about to get worse with the number of new properties being built unexpectedly crashing in every state or territory except one.

The first quarter of 2023 was the weakest for building approvals since 2012 across the nation, a result many experts didn’t see coming.

In NSW total building approvals for March plummeted by 34.1 per cent compared to a year ago, while in Victoria they tumbled 26.6 per cent.

In the Australian Capital Territory the fall was a huge 35.3 per cent, while they dropped 19.1 per cent in the Northern Territory.

Approvals also declined in Western Australia by 14.9 per cent, Tasmania by 10.8 per cent and South Australia by 5.7 per cent.

Declines in housing approvals are bad news for renters as low vacancy rates, which can make it feel impossible to find a new home, are likely to worsen

Experts also predict the low vacancy rates will drive prices up

Queensland was the only Australian state or territory to see growth in building approvals.

Nationally, building approvals for units are lower than at any time since 2012.

The number of detached house approvals was 15 per cent lower than the same time in 2022.

The decline spells bad news for renters with a shortage of houses and low vacancy rates largely to blame for recent rent increases.

The Housing Industry Association predicted rentals costs, which already grew by 17.6 per cent for units and 14.6 per cent in capital cities last year, could now climb higher still as supply fails to keep pace with demand.

Nationally the residential vacancy rate is 1.1 per cent, the same figure as Melbourne and Hobart, while it’s 1.3 per cent in Sydney and a crushing 0.5 per cent in Adelaide.

The return of migrants, students and tourists to Australia could mean vacancy rates will worsen.

‘This imbalance will see the affordability and rental crisis deteriorate further,’ said Tom Devitt, HIA senior economist.

NSW Tenants’ Union CEO Leo Patterson-Ross told Daily Mail Australia the pressure was on the government to deliver much-needed good news to renters in the budget on Tuesday.

‘This is a critical budget to set up the recovery in the renting and housing system,’ he said.

Mr Patterson-Ross said families that rent are too often in crisis.

‘We are hearing from people sleeping in cars, in makeshift homes that do not provide proper protection or might be unsafe or dangerous environment.’

The first quarter of 2023 was the weakest for building approvals since 2012 across the nation, a result many experts didn’t see coming

Australia’s rental crisis could be about to get worse with the number of new properties being built unexpectedly crashing in every state or territory bar one

HIA said rising construction costs and uncertainty over labour are among the reasons approvals are so low, while interest rate rises from 2022 are a big factor too.

The lag between a rate rises and the approval process means this year’s three rate rises could keep total housing approvals flat for months to come.

Mr Patterson-Ross, said the figures were ‘so disappointing’ and the approval numbers are on par with the aftermath of the global financial crisis.

‘The situation we are in is the culmination of decades of governmental inaction, very often as a result of pressure from industry not to take meaningful action.’

Mr Patterson-Ross said housing needs to be taken as seriously as other essential services.

‘This is an essential service, and when we face a breakdown in other essential services the whole community, government and industry acts to make sure the community continues to receive what they need.

‘We need a new conversation about renting and housing in Australia.’