New home starts sink to 11-year low

Master Builders Australia

The latest building activity data released by the Australian Bureau of Statistics has confirmed there is still a long way to go before Australia overcomes the housing crisis.

Master Builders Chief Economist Shane Garrett said work started on just 163,285 new homes during 2023, a 10.5 per cent reduction on the previous year.

“During 2023, detached house starts dropped by 16.4 per cent to 99,443. This is the lowest in a decade.

“The final three months of the 2023 quarter saw higher density home starts drop for the third consecutive quarter.

“A total of 62,720 higher density homes were commenced during 2023 overall – the worst performance in 12 years.

“The mismatch between the supply of new homes to the rental market and demand for rental accommodation is particularly worrying.

“Rental inflation continues to accelerate at a time when price pressures across the rest of the economy have been abating,” Mr Garrett said.

Chief Executive Denita Wawn said today’s result means that 934,400 new homes have been started across Australia over the past five years.

“Yesterday, Master Builders Australia released its latest industry forecasts which showed we are on track to fall over 110,000 homes short of its Housing Accord target.

“When it comes to signing new contracts, the pen is not making it to paper as the investment does not stack up.

“Since 2019 we have seen the cost of home building increase by 40 per cent.

“Governments need to work to change this. The cost of delivering projects needs to go down and the time to completion must be shortened.

“To achieve these targets, builders are ready to take on the challenge, but clearing the barriers on the road is necessary to get the job done,” Ms Wawn said.

/Public Release.