It’s been 11 years since the building approvals in Queensland and around Australia hit a monthly low like they did in April. To put it into context, 2012 is when Barack Obama was elected president of the US. It’s been a long time since we found ourselves in a housing situation such as the one facing us!
Brisbane housing simply isn’t keeping up with demand, and when stats like this come out it becomes very apparent there’s no quick fix in store. In fact, our building approvals are down in Queensland by more than they are anywhere in the country, with approvals down here by 22.8% since the start of the year, far more than any other location.
According to ABS (Australian Bureau of Statistics) data, the total number of dwellings approved nationwide fell by 8.1% in April. Private sector dwellings excluding houses fell 16.5%, while house approvals fell 3.8%. Compared to this time last year, total approvals have fallen 24.1%!
Compounding the Housing Supply Issue
Belinda Allen is a senior economist at CommBank, and she says there are two issues facing Australia when it comes to housing supply. The first is the low level of approvals we’ve been talking about. The second is the lengthy time it is taking to get past approvals completed.
There is a huge pipeline of approved construction work waiting to be built, amounting to a value of over $53-billion, according to the ABS. Unfortunately, a large portion of this work was quoted on fixed price terms that have since become unprofitable. It’s either been shelved, renegotiated or the builder has gone under.
This is part of the reason why nearly 1500 construction companies have shut down since last June – another factor playing its part in the disparity between housing supply and demand.
The time between approval and construction is not showing any signs of getting shorter. The hangover of pandemic–era logistics issues, soaring building costs and a difficult funding environment have ensured that.
Compounding the crisis is that in the face of building approvals and construction hitting record lows, demand for housing is soaring.
Housing Demand is Sky High
In April, “the National Housing Finance & Investment Corporation (NHFIC) released its State of the Nation’s Housing report, which forecasts that demand will exceed supply by 124,100 dwellings over the five years to 2028 amid record net overseas migration”.
Basically our population is growing, and housing simply can’t keep up. According to the ABS, our population in 2022 grew by a record 482,000 people, with net overseas migration being around 400,000. Queensland again is leading the charge in population growth, growing at 2.2 percent per annum compared with 1.6 percent nationally (Basically we have the highest population growth and the lowest rate of building approvals!)
All these people need a place to live, and our construction industry isn’t keeping up. With the volatility in the building market we spoke about above, many of them aren’t willing to sign onto a new build that could end up never materialising (remember the Porter Davis fiasco?)
This is placing huge pressure on the rental market, which we’ve talked about extensively in previous posts. It’s also placed upward pressure on the market for existing abodes, with the stock on the market well short of the buyers out there looking to purchase a home.
Capitalise on the High Demand
If you’re in a position to sell your home and move onto the next chapter in your life, be assured there are plenty of buyers out there who will be interested in your home. They are buyers who have become wary of the construction process, or who are tired of the rental rat race that has amplified the cost of living of renters in Brisbane and around Australia.
Ideally, you want an established agent who can tap into this pool of buyers, while using their robust network to appeal to wealthy interstate and overseas buyers too.
Henry Wong and his team have been selling Brisbane real estate for many years now, building up a formidable network of colleagues and contacts during that time. It’s a network they’ve become adept at leveraging to ensure maximum visibility when you sell your home through them. A network that includes wealthy Asian buyers and interstate professionals which your average local real estate agent just can’t provide.
If you’d like Henry to put this network to work for you, please get in touch. He’d love to explain how he achieves auction clearance rates of over 90%, and how he can do the same for you!