UDIA warns that one month’s data does not a trend make
ABS data for the month of August saw strong growth in building approvals, but this followed a very weak result in July and reflects a small state-wide uptick in approvals in NSW by 2% in the year to August.
However, UDIA says that despite the number of approvals showing an improvement compared to July, we must focus on the trends in approvals which are still critically low compared to the peak.
Apartment approvals hit decade lows in July, and although showing the small increase, rolling annual approvals are still 66% below its 2016 peak and total housing approvals are also 29% below peak.
Source: ABS and UDIA – 4 October 2022
“Poor approvals signal a lack of sustainable jobs in construction, and hurt the long term development pipeline, hampering affordability and reinforcing the housing shortage,” said Steve Mann, CEO UDIA NSW.
“With the expected return of migration at a higher migrant cap, the delivery of apartments is significant and we need to see approvals at or close to their peaks if we are to welcome back international students and skilled workers after almost 3 years. Now is the time to build confidence in the apartment market following government reforms,” said Mr Mann.
With commencements and completions data for 2022 Quarter 2 expected later this month from ABS, UDIA hopes to see approvals continue to trend upwards, however the question remains of how the downwards trend of approvals has impacted the availability of homes.
UDIA stresses the importance of looking at the “big picture” for approvals, and not one month’s narrow data.
“We need to create more opportunities to fix the housing shortage by creating mixed-use precincts around stations. One way is to fix the government-imposed barriers to the apartment market. This will help ensure that people have a place to live and will maintain the attractiveness of our state,” said Steve Mann.
Deanna Lane 0416 295 898 or firstname.lastname@example.org