Record levels of dwelling building approvals look set to provide Australia with a needed boost to housing supply, and the construction industry with a supply of jobs.
According to the property lobby, 2015 is going to be a year of new home building activity. The activity is said to be occurring in regions of Australia that have been under-building over the last decade. This may helpalleviate the housing shortage that Australia is currently experiencing.
Recent Building Approval Figures
Current Australian Bureau of Statistics (ABS) figures highlight the strength of recent building approvals. According to November 2014 figures, the number of new building approvals was just below 200,000 homes. This was 40,000 more than in November 2011, and tops the previous 1994 record of 187,000 homes.
This residential growth, according to industry experts, is enabling Australia to catch-up with recent population growth. This, in turn, can have a positive impact on housing affordability if linked to the supply of land release, tax reform and development assessment.
Planning Reform May Be Needed to Enable Continued Housing Growth
The additional GST income and stamp duty generated from new home approvals should be an adequate incentive for the government to consider their approach to competition policy, especially where planning reform is concerned. Changes to this policy are needed to ensure that the strong building cycle is not lost due to poor planning.
The current growth in the building industry allows the government to work directly with the construction sector on reform when the industry is at its best. However, many government watchdogs are suggesting that without reform to current legislation the building sector may be restricted and unable to deliver to their fullest potential. This could result in less homes being built, and revenue being lost.
Overall, the increase in the number of jobs in the construction industry will assist the Australian economy, and help to reduce unemployment rates. This could not only be a stepping-stone to greater housing affordability, but may also be the boost that the Australian economy has been searching for.
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Written by eChoice