House building times blow out to almost a year
Benn Dorrington, Property Journalist
First published 01 November 2023, 05:24 PM
Last updated 10 November 2023, 09:21 AM
It's yet another hit to Australia’s worsening housing crisis, as the population grows at a rapid pace and home building weakens further.
New analysis from Master Builders Australia has revealed the average time to build a detached house increased from 10.3 months to 11.7 months nationally during 2022-23.
MBA chief executive Denita Wawn said the delivery of new homes had been obstructed by the combination of labour shortages, broken supply chains and other Covid restrictions.
“This is on top of the already formidable set of impediments in the form of planning delays, insufficient land release and red tape,” Ms Wawn said.
“These unnecessary delays to construction ultimately drive up the cost of building which has already faced inflationary challenges with building product prices and a tight labour market.”
The analysis found new townhouses are now taking 14.9 months from approval to completion, compared to 13.5 months in 2021-22.
The average house build time increased 13.7% to 11.7 months nationally during 2022-23. Picture: supplied
While apartment building times shortened to 28.8 months in 2022-23, from a record 30.6 months a year earlier, Ms Wawn said they're still taking far longer than was normal before the pandemic.
“When our output of new apartments was at record levels back in 2015-16, it took just 21 months to complete a build,” Ms Wawn said.
Australia’s home building industry has been troubled by a slew of factors, including rising construction costs for materials and labour.
The number of new homes that commenced construction declined during the three months to June 2023, down 11.8% to 40,720 dwellings, according to the Australian Bureau of Statistics.
Separately, new building approval data released Wednesday showed the number of homes in the pipeline remains at decade lows, with approvals declining 4.6% to 13,144 in September.
Federal, state and territory governments are pushing ahead with an ambitious plan to build 1.2 million homes over the next five years in an attempt to alleviate the country’s housing shortage.
But PropTrack economist Anne Flaherty said the flow on effects of longer build times would also make it more expensive, and lead to fewer completions.
“The fact that building costs are higher and timelines are longer than what we normally see means that the supply of new housing is likely to fall to below those long-term average levels,” Ms Flaherty said.
Home building starts and approvals are sitting at multi-year lows. Picture: supplied
“Australia is not on track to succeed in delivering those 1.2 million new homes."
Ms Flaherty said the average number of homes built in Australia was about 190,000 per year, however some 240,000 homes would need to build each year to reach the 1.2 million new home goal.
