Australia is trying to build 1.2 million homes, but they're getting stuck
There were a further 219,000 homes under construction in the March quarter, Cotality analysis of ABS figures shows, similar to the levels during the building boom of the 2010s – except that, this time, homes are taking longer to finish.
Cotality head of research Eliza Owen warned that homes were being approved and then getting stuck.
Building costs surged after the COVID-19 lockdowns and have not returned to pre-pandemic levels, while the average number of quarters taken to complete a new unit has risen from about six a decade ago to more than nine.
Owen highlighted the federal government's target of delivering 1.2 million new homes over five years.
The closest Australia came to delivering this many homes in a five-year period was in the five years to December 2019, when just over a million homes were completed.
Owen noted that this was in a different context: the cash rate then was lower, units made up a larger share of approvals and investors – including foreign investors – were a larger share of demand.
She added that this did not necessarily lead to good housing outcomes. Despite the supply, home ownership rates fell from 67.2 per cent in June 2014 to 66.2 per cent in June 2020. Some of these were new apartments in which defects were so rife that some new dwellings could not be lived in.
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