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News.com.au
30-05-2025
- Business
- News.com.au
New housing approvals slip dangerously far behind National Housing Accord
Australia's housing shortage has taken another turn, with new data from the Australian Bureau of Statistics showing a sharp decline in overall dwelling approvals. The drop has been fuelled largely by a collapse in apartment construction, raising fresh concerns for young Australians already locked out of the housing market. The 'Australian dream' of a quarter-acre block was dashed for millions of Aussies long ago, but now it appears even the smallest of apartments are quickly falling off the table as well. For those born after 1990, who weren't gifted a trust fund, house deposit, or struck it big with a wild crypto gamble, the following figures will come as tough reading. The ABS figures, released on Thursday, revealed the total number of dwellings approved in April fell by 5.7 per cent to 14,633. The drop was driven primarily by a 19 per cent fall in approvals for private sector homes excluding standalone houses, which include apartments and townhouses. 'A drop in apartment approvals drove a 19.0 per cent fall in private dwellings excluding houses,' said Daniel Rossi, ABS Head of Construction Statistics. 'Meanwhile, private sector house approvals were up 3.1 per cent.' The collapse in higher-density approvals comes as Australia's population continues to surge, exacerbating what economists, social researchers and rental advocates have long warned is an unsustainable imbalance between supply and demand. According to CoreLogic, the national median dwelling value has increased more than 30 per cent since the start of the pandemic, while rental vacancies remain near historic lows. But new homes, particularly more affordable and urban apartments best suited for first homebuyers, aren't being built at a rate that reflects demand. The situation leaves younger Australians, who already face stagnant wages, high interest rates and record living costs throughout their working life, in an increasingly untenable position. Even April's modest rise in private sector house approvals, driven by 7.3 per cent increases in both New South Wales and Queensland, is unlikely to shift the dial. At 9,349 approvals, the result represents a 4.6 per cent year-on-year increase but does little to compensate for the decline in apartment projects. 'New South Wales had over 2,000 private sector houses approved for the first time since December 2023,' Rossi said, suggesting demand remains high in key states. However, critics argue that standalone homes are becoming increasingly unaffordable or geographically inaccessible for most first-time buyers, especially in capital cities. 'A key driver of recent movements has been the increased value of non-residential projects rather than the number,' Rossi explained. The numbers land amid calls for bold federal and state intervention to fast-track housing construction and cut red tape for medium- and high-density developments — reforms that housing experts argue are long overdue. 'Data confirms the federal government's failure on housing, as new housing approvals slip further behind National Housing Accord targets. The Accord has failed to deliver the level of new houses promised for the tenth consecutive month,' said Morgan Begg, Director of Research at the Institute of Public Affairs. 'Over the first ten months of the federal government's Accord, housing approvals have failed to hit a single target and are now 27 per cent behind where they were promised to be,' Mr Begg said. 'With housing approvals so low, Australia is being set up for a disaster, as in the last three years to June 2025, net migration is on track to be 1.3 million, meaning the gap between demand and supply is drifting further apart. 'Today's new figures reinforce the depth of Australia's housing crisis, brought about by out-of-control migration, a construction sector burdened by red tape, and competition for resources from large, expensive, and inefficient taxpayer-funded construction projects.' But it gets even worse. The IPA claims the time it takes to build a house, from approval to completion, has increased by a whopping 50 per cent over the last 10 years. It has shifted from an average of just over eight months in 2014 to almost 13 months by 2024. 'The federal government clearly does not understand Australia's housing market. It has overestimated the capacity to build new homes, while it has continually underestimated its migration intake forecasts,' Mr Begg said. 'It has created the perfect storm of rising prices and rents in the housing market that has put the great Australian dream of homeownership out of reach.'
Yahoo
14-05-2025
- Business
- Yahoo
Family embrace $1,200 property shift many Aussies are reluctant to accept: 'Taken care of'
A Sydney mum-of-two has shared how she and her husband got into the pricey property market by embracing a growing housing trend. The Great Australian Dream used to be owning a house with a big backyard and Hills Hoist. But that has become a thing of the past for many families, with more turning to apartment living. Some revile the lack of space that comes with high-density living — something that's more commonplace in Europe or Asia. However, Liliana Rubiano told Yahoo Finance it's been the perfect move for her family-of-four, who have been lived in three different apartment in their Chippendale building over last 11 years. RELATED Rent tactic allows Aussie to buy $435,000 property with tiny deposit: 'Ground-breaking' Retirement warning as controversial $3 million superannuation tax change looms: 'Be proactive' Photo of huge lines expose $51 billion Gen Z trend sweeping Australia: 'Reaping the reward' 'We are very happy. It has 24/7 security, it has a concierge, it has a nice 25 metre swimming pool outdoors, it has a spa which is heated, it has a beautiful gym,' Rubiano said. 'The strata fees are very, very expensive, but I'm happy to pay for them because of all the facilities.' Rubiano and her husband, Fernando Mora, started off renting a one-bedroom in the building. In 2022, they purchased their first home — an apartment on another level for $605,000. It's something Rubiano said wouldn't have been possible if they had opted for a house. 'They are much, much more expensive, at least where we would like to live in the city,' she said. When their family expanded with the birth of their second child, they needed more space but didn't want to leave their building. Instead, they rented theirs out for $750 and moved into a $1,200 two-bedroom apartment, which is just under 80 square metres. Rubiano said the rental income was covering the couple's mortgage repayments, but not strata fees, which are $8,000 a year. The move was an adjustment for the 37-year-old who had previously lived in a three-storey house in Colombia. 'I learned to become a minimalist when I moved here. In Colombia, we have a saying that human beings are animals that get used to things,' she said. 'That is pretty much true because you become a minimalist and learn to live in a small place. When I get one pair of shoes, I get rid of another pair.' Rubiano is one of many Aussies who are turning to apartments over houses. The 2021 census found more than 2.5 million people, or 10.3 per cent of the population, now live in apartments. The number of occupied apartments has increased by nearly 60 per cent since 2006, with the rate of growth outpacing housing. Nearly one in five family households in Sydney lived in an apartment, compared to one in 20 in Brisbane and Melbourne. In Sydney, the median house price is $1,470,625, while in Melbourne it is $917,616 and in Brisbane $977,575, according to Cotality, formerly known as CoreLogic. Ray White director of projects and developments Tim Abbott said he had seen the shift towards apartment living over the last decade from first-home buyers, families and downsizers alike. 'A lot of it comes down to convenience and maintenance. We're seeing some families that are quite happy with a busy lifestyle and want to be close to the city,' he told Yahoo Finance. 'They don't have the time that they once did to be doing the gardening each weekend and maintaining a house. 'So having a good-sized apartment where the maintenance is taken care of by the strata rather than themselves, particularly in developments where there are good garden areas, good outdoor areas and cafes and restaurants around.' Abbott said two-bedroom apartments in particular were often attractive for first-home buyers from an affordability standpoint. Developers are taking note of the shift, too, with Abbott noting a shift towards creating more spacious apartment blocks, catering to families. Willoughby Grounds, a project Abbott is involved with on Sydney's lower north shore, for example, has been built with a dedicated playground, four-bedroom apartments and intends to cater to families who can no longer afford freestanding homes in the area. 'Developers are understanding what people are looking for and designing apartments to fit that need,' Abbott said. Rubiano said living in an apartment was the right move for her family and their current lifestyle. Her husband works in project management in Barangoo and can cycle, run or walk to the office. Rubiano runs her own small business, boardshort company Tolu, and utilises the apartment building's storage space to store her products. 'We have a Woolworths downstairs, we have a pharmacy, liquor shop, medical centre, massage, restaurants,' she said. While the strata fees are expensive and she misses not having space outside for her kids to play, Rubiano said the positives outweigh the downsides and she doesn't plan to go back to living in a house. "The pros at this stage in our life are more than the cons," she said. 'When [the kids] are bigger, they will want their own spaces then we will have to look for an alternative with a little bit more space. 'But I would still prefer to live in an apartment rather than a house because of the maintenance and the cost of maintaining a house and the stress and the clutter.'
News.com.au
13-05-2025
- Politics
- News.com.au
Sussan Ley a ‘unique opportunity' for Liberal Party, VP says
Sussan Ley is a 'really unique opportunity' for the Liberal Party to embody the 'Australian dream' and 'rebuild around that' after the crushing defeat at the federal election, one of the party's most senior women says. Liberals on Tuesday elected Ms Ley to succeed Peter Dutton as leader after he was dramatically unseated on May 3. Ms Ley's election came after a week-and-a-half of 'soul-searching' and a bruising leadership contest between herself and Angus Taylor. Federal vice-president Fiona Scott said on Wednesday she expected the Liberal Party would 'rally behind' their new leader and deputy, Ted O'Brien. 'What I think we will see is the Liberal Party will rally behind Sussan and Ted (O'Brien),' she told the ABC. 'It doesn't mean that great talents in our party like Angus (Taylor) won't still provide superb input – same as Jacinta (Nampijinpa Price) – and it's good to have that diversity of perspective and view. 'But right now, I think the party room did make the right decision yesterday, and it's really important on us that we've been given the opportunity, maybe taking kicking and screaming to have to rebuild the party and take it back to basics and move forward from there. 'And I think Sussan is a step forward to say that we have listened.' Reflecting on the election loss, Ms Scott said there were 'a range of challenges' but echoed the sentiments of many Liberal MPs that the 'Australian public didn't see themselves in us in this election'.
The Guardian
09-05-2025
- Business
- The Guardian
Labor wants to fix Australia's housing issues – but there's little hope for those not already on the ladder
Days after Labor won a decisive victory with a mandate to fix housing affordability, those in charge of handing out mortgages poured cold water on it coming to pass. Andrew Irvine, the chief executive of National Australia Bank, said the country 'may not get the outcome we want' as the gulf between homeowners and everybody else threatens to expand in the coming months. The long-serving ANZ chief executive, Shayne Elliott, was even more forthright when addressing media on Thursday. 'I don't know we are dealing with it. I mean, things are getting worse,' said Elliott, who stepped down from his role on Friday after almost a decade leading the bank. Sign up for Guardian Australia's breaking news email 'I know there's really well-meaning, really thoughtful policies on both sides of politics … but the reality is, as we sit here today, I'm not sure there's confidence that we are going to see any material change any time soon.' The bank bosses pointed to a lack of housing supply for their dour outlook. There are also other factors, such as the need to improve transport networks and infrastructure to ignite that supply, resolve unnecessary planning impediments, tackle high building costs and labour constraints. The affordability problem has built up over decades, and Australia's banking CEOs don't believe the issue will be resolved any time soon. 'The Australian dream is owning a home, and you want younger people to have a chance to do that, you want new Australians to have a chance to do that,' said Irvine. 'The only way we're going to address this is to fix supply. It's still the case that too much of the discourse on housing is on the demand side.' The lack of reformist housing policies – economists criticised both sides of politics for their competing election platforms – is fuelling an expectation that home prices will just keep rising, putting home ownership even further out of reach for younger generations. Many housing reform advocates gave up on expecting federal governments to help resolve the issue after Labor's ill-fated 2019 campaign to overhaul negative gearing and capital gains tax, both of which would have represented robust reforms. Advocates are now focusing their attention on rental rights, which are a state issue. The thinking is that improving tenancy rights may lower the value of rental properties, easing affordability at the expense of landlords. Those already on the property ladder don't want to get off it. Even the banks were surprised how many of those who scrambled to get a mortgage in recent years – and then faced a string of interest rate increases and sharp rise in living costs – kept up with repayments. 'The resilience of customers who have navigated significant cost-of-living challenges over the past few years is impressive,' Westpac chief executive Anthony Miller said on Monday, after delivering the bank's half-year results. Part of the reason people clung on to their mortgages so tightly is that there are no good alternatives, given the tight rental market. Mortgage arrears at the major banks have tended to plateau, or even drop, over the past six months, hovering well below pre-pandemic levels. The number of households requesting hardship packages from their lenders has generally been falling. For those able to hang on to their mortgages, relief is in sight. After the Reserve Bank reduced borrowing rates in February, a quarter-of-a-percentage point cut in the cash rate on 20 May is deemed a sure thing, and would lower the key rate to 3.85%, from 4.1%. From there, financial markets are pricing in a further three cuts to 3.1% by December. Experts are a little less bullish, with a general consensus that the cash rate will end 2025 at 3.35%. Either way, mortgage holders are set to receive substantial relief on their interest payments. The monthly repayment on a $500,000 loan at an interest rate of 6.01% is $3,225. Every cut of 0.25 percentage points lowers the interest bill by $76 a month. A further four rate cuts this year would deliver a $304 boost to monthly household budgets. While existing homeowners will be cheering falling rates, the picture is more complicated for those hoping to break into the property market, or upgrade towards a family home. Lower interest rates boosts borrowing capacity – meaning buyers can afford to pay more. But cheaper money will also lift prices and potentially widen the deposit gap, and worsen the affordability crisis. AMP chief economist Shane Oliver said he expected a rate cut on 20 May followed by another in August. He then expects a cut in November and then again early next year. Oliver said the combination of cheaper loans and Labor's election housing policy to help first home buyers buy with a smaller deposit would ultimately push property prices higher. 'Lower rates and 5% deposits may feel like a good thing, and if you get in early it will be, because they can borrow more and it will be easier to service your loan,' he said. 'For those who get in later (after prices have started climbing faster), it's not so good – and the ultimate winners are existing homeowners.' Louis Christopher, the founder of SQM Research, said rate cuts – if they happen – will have a progressively greater impact on house prices as the year passes. Still, with the election and April holidays out of the way, Christopher expects a busy winter of property auctions. 'We expect housing prices across the country to climb by 6-10% in 2025,' he said.
Bloomberg
29-04-2025
- Politics
- Bloomberg
Australia's Housing Crisis Needs More Than a Renovation
Perhaps no other movie depicts the Australian Dream of owning a home more than the 1997 classic comedy The Castle, in which theKerrigan family takes on developers to save their house. Fast-forward 28 years and nobody is laughing. For the first time, Millennial and Gen Z voters will outnumber those aged over 60 at polling stations on Saturday. Housing is a — if not the — top concern in this federal election. Most are resigned to never being able to get into one of the world's most unaffordable markets. Policies put forward by the two major parties are unlikely to make things better.
