Australia’s Building BOOM and Property Shortage Crisis
by Leigh Martinuzzi
Last week I wrote about new building approvals with the thought that by the end of 2021 and into 2022, we may see an oversupply of properties. This was based on the fact that in Australia in April we saw an increase in new building approvals of about 5% or approximately 35,000 new dwellings. This has been a consistent upward trend in 2021, with estimates, if the trend continues, suggesting we could have total new building approvals for both houses and units in 2021 of up to and above 350,000 dwellings.
With net population increase down, sitting around 130,000 for the past 12 months and international immigration at a standstill, I would imagine there would be much more choice out there for property buyers in a year or two taking into account lag time for building completions. However, while building approvals are up, according to a report by the team at Michael Yardney, property approvals are still down on the average of the last three years suggesting there may be a continued housing shortage in the years ahead. The figures highlight that housing approvals across Australia are actually down by 115,000 dwellings or 16.9%. In Brisbane, approvals were down 29.8%.
On the Sunshine Coast, the council zoning review isn’t due until 2024. And although I’ve heard this may be bought forward considering the potential housing shortage crisis we are facing, I’ve had no official confirmation of this. Most people I speak to don’t like the idea of clearing more land to accommodate more housing, however, unless we can all become a little more comfortable with high-density living, I don’t see how this cultural desire will shift. It’s an easy solution to continue to develop our land but is it the right solution?