Housing approvals remain in doldrums

Building approvals continued to disappoint, with weakerthan-expected results for January providing little indication that Australia’s chronic housing shortage is on track to ease.

Total dwellings approved slipped 1 per cent in January, the Australia Bureau of Statistics reported on Monday, with just 12,850 new homes signed off for construction.

Economists were forecasting an increase of 4 per cent.

The monthly reading brings the number of dwellings approved in the 12 months to January to just 163,000.

That’s well short of the 240,000 new homes that would need to be constructed annually to meet a target of building 1.2 million homes in the five years from July 2024.

January’s result was driven by a steep decline in detached housing approvals, which plunged 9.9 per cent to 7461.

However more volatile approvals for units, apartments and townhouses surged 19.5 per cent across the month, driven by a rise in apartment approvals in Queensland.

Building approvals were mixed by state, with declines posted in NSW (-14.9 per cent), Victoria (-9.8 per cent) and South Australia (-7.2 per cent). However, Queensland climbed 31.8 per cent, Western Australia rose 11.4 per cent and Tasmania firmed 5.1 per cent.

The data comes as the Albanese government faces a Senate logjam to pass its Help to Buy scheme, which would see the government take an equity stake of up to 40 per cent of the purchase price on new and existing homes, later recouping the funding, plus its share of capital gain on the home, when the property is eventually sold.