Building Activity figures released today by
the ABS clearly indicate that the decline in housing activity which threatens
to impact the economy across jobs, tax and demand-equivalent supply is gathering
Dwelling units commenced dropped by 20 per
cent year-on-year from 230,522 commencements a year ago to 196,867 for the year
ending 30 June 2019.
Nicholas Proud, CEO of PowerHousing
Australia, which represents 34 of Australia’s largest Tier One and scale-growth
Community Housing Providers, said “the latest ABS Building Activity figures
show that there is a vacuum of 35,000 homes that are not being built going
forward, which holds serious ramifications for jobs, taxes and valuable supply with
such a significant drop in activity.
“With around 40 trades and
subtrades receiving work from every new house delivered, we today say goodbye
to around 1.4 million future trade and para professional engagements lost for
good as the number of new homes drop by 35,000 dwellings on the previous year.
Australia shifts back from the meteoric 230,000 home starts down by potentially
70,000 fewer homes delivered in 2022, prices may rapidly rise again once supply
below the 180,000 homes roughly
needed annually to support the demand. The risk is that if supply declines
below demand once again and we don’t build enough homes to meet population
needs, then excessive price rises will recommence above already unaffordable
the current commencements for the past year remain high, the downward trend and
velocity of the drop must not be ignored otherwise recent small but positive affordability
gains will be lost.
years ago Australia commenced only 132,501 dwellings to the year ending 30 June
2009, which fuelled price spikes across Australia and decimated housing affordability
to levels that we have as a legacy today.
“Affordable housing is one of the
last growth levers that can be pulled to reduce the housing commencement
downturn. With the emerging Community Housing Provider sector increasing its
size of development and management substantially over the past 5 years we are
seeing supply solutions built by these organisations in this emerging social
and affordable asset class.
“If given the right incentive
such as property transfer, concession to provide rentals at more affordable
below market levels with government guarantee then there is a global wave of international,
institutional and domestic environmental, social and governance investment that
could emerge to see new pre-commitment to scale developments underpin falling
“In addition to the NHFIC Bond
Aggregator, the activation of the soon-to-operate NHFIC Research House will
also support new innovative financing mechanisms to the deliver the additional
homes that will be needed in 2020-22.
“With the Federal Government now assigning three ministries to housing, this building activity data demonstrates the need for best practice options for delivering affordable homes to drive new commencements, halt the decline and support the overall economy.