️ Highlights:
1. Owner residents outnumber investors in new housing loans, with most investors buying existing homes.
2. Australia sees twice as many detached houses being built compared to attached dwellings, with townhouses dominating new attached dwelling construction.
3. Construction costs are a major barrier to larger apartment project approvals, along with high interest rates, planning delays, and labour shortages.
4. Melbourne is focused on becoming the nation’s rental capital, with policies aimed at decreasing dwelling/car ownership and increasing renting.
5. Western Australia has relaxed planning laws to allow homeowners to build small second homes on their property without needing planning approval, addressing new housing supply issues.
In a recent post by Matusik Missive, the dynamics of Australia’s new housing market are explored through a series of charts and tables, shedding light on the current state of affairs with minimal commentary but revealing insights. The analysis delves into the composition of new housing loans, the preferences of investors versus owner-occupiers, the types of dwellings being constructed, and the challenges facing large-scale residential development.
Owner-Occupiers vs. Investors
The data reveals a clear preference among owner-occupiers for new housing loans, outnumbering investors in this segment. Interestingly, about 70% of investors opt for existing homes rather than new constructions, indicating a significant divergence in investment strategies between these two groups.
Detached Houses vs. Attached Dwellings
There’s a notable trend towards the construction of detached houses over attached dwellings, with the former being built at twice the rate of the latter across Australia. This trend has been widening in recent years, with townhouses dominating new attached dwelling constructions while mid and high-rise apartment approvals have plummeted over the past seven years.
Challenges in New Home Building
The analysis points to several barriers to new home building, including the high and rising cost of construction, high interest rates, delays in obtaining planning approvals, and labor shortages. These factors are contributing to a downturn in larger apartment project approvals, highlighting the complexities of the current housing market.
Diverging Paths of East Coast Capital Cities
The post also touches on the diverging paths of Australia’s east coast capital cities, with Melbourne aiming to become the nation’s rental capital through state government policies. In contrast, Sydney faces challenges with planning delays, and Brisbane’s large-scale construction is hindered by union activities and skills shortages. The Queensland government’s new Homes for Queenslanders scheme, aimed at reducing the cost of housing, is scrutinized for its potential effectiveness based on New Zealand’s experience.
Western Australia’s Planning Reforms
In a positive note, the Western Australian government’s relaxation of planning laws to allow homeowners to build small second homes on their property is highlighted as a well-aimed reform to address new housing supply issues.
Conclusion
The snapshot of the new housing market offers a concise yet comprehensive overview of the trends, challenges, and policy directions affecting Australia’s residential construction sector. As the market continues to evolve, these insights provide valuable context for understanding the forces shaping the future of housing in Australia.