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Home building approvals increase from decade-low levels

A major win for home owners and builders this week, as the rate of home building approvals has increased after a decade of low approval rates. 

A major win for home owners and builders this week, as the rate of home building approvals increased after a decade of low approval rates.

The Australian Bureau of Statistics released its monthly building approvals data for May 2024 for detached houses and multi-units covering all states and territories.

The data highlighted the increase of 5.5 per cent in the month of May 2024 of building approvals for new homes.

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“This leaves approvals in the three months to May 2024 down by 1.5 per cent compared to the same period in the previous year,” HIA chief economist Tim Reardon said.

“There were 14,180 residential building approvals in the month of May, with 9,260 detached house approvals and 4,920 multi-units.

“Detached house approvals increased by 1.3 per cent in May 2024 and have been slowly strengthening in recent months.”

The multi-unit approvals also increased by 14.3 per cent in May. However, multi-unit approvals remain 19.1 per cent lower than in the same period in the previous year.

“There have been 163,760 total dwelling approvals over the most recent 12 months to May 2024,” Reardon said.

“This is well below the 240,000 new homes needed each year from 1 July 2024 to achieve National Cabinet’s goal.

“The low approvals numbers indicate a slow start to building 1.2 million homes over the next five years. Increasing the number of homes built will be necessary to address longstanding housing shortages. Addressing tax, planning, land and regulatory constraints will be necessary to increasing the supply of homes in Australia,” Reardon said.

Home approval rates in states and territories

In seasonally adjusted terms, approvals in the three months to May 2024 saw an increase of 51.1 per cent in Western Australia compared to the same time in the previous year.

This was followed by Victoria (+10.0 per cent). The other jurisdictions recorded declines over the same period, led by the New South Wales (-21.6 per cent), followed by South Australia (-6.0 per cent) and Queensland (-4.8 per cent).

In original terms, the Australian Capital Territory recorded a 33.4 per cent increase in approvals in the three months to May 2024 compared to the previous year. Approvals over the same period fell in the Northern Territory (-34.3 per cent) and in Tasmania (-16.3 per cent).

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