Building approvals reach record heights as housing affordability challenges remain

As the housing affordability debate continues, the latest data from the ABS reveals that building approvals have reached a new record over the past 12 months despite a small dip in approvals in May.

Across the nation 218,442 new dwellings were approved in seasonally adjusted terms for the 12 months to May 2015, up substantially from 192,561 approvals for the 12 month period to May 2015 - a rise of 13% year-on-year.

Executive Director Residential for the Property Council of Australia, Nick Proud said the result was the “best possible news for combatting the challenge of housing affordability.”

“The only meaningful way to take the pressure off prices is to increase new housing supply and today’s data shows Australia is continuing a significant run of residential approvals,” he said.

According to the ABS Buildings Approval data the rise was clearly illustrated in New South Wales where building approvals rose from 34,500 for the year to May 2012 to 57,088 for the year to May 2015.

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Proud said that housing affordability will improve in New South Wales when “dwelling completions pick up from long run levels of around 28-30,000 completions per year to match the current annual building approval levels.”

He also said that this level of activity must be sustained for the foreseeable future and “punitive, inefficient taxes like stamp duty” are a barrier to home ownership and supply growth, following recent statistics by the Property Council of Australia found that average stamp duty costs have increased by 800% in the past 20 years.

“Housing construction is one of the few bright spots in australia’s economy, creating jobs and economic growth. Tax and planning reform are vital if we are to maintain this strength.”