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Developers Warn Rate Rises and Budget Taxes Could Stall Home Building Approvals
Developers say interest rate increases and Labor's tax changes could stall home building approvals in Australia.
Key points
- Annual building approvals fell 0.8 per cent, the first annual contraction since January.
- Cotality data showed capital city house prices fell 5 per cent in the three months to October 31.
- NSW had the lowest per capita building approvals at 6.2 for every 1000 people, against a national average of 7.5.
Why it matters. Forrest argues the effects of rate rises and Federal Budget tax changes are yet to flow through, so future approvals and home completions could weaken.
Urban Taskforce chief executive Tom Forrest told The Nightly that interest rate increases and Labor's tax changes threaten future approvals. ABS data showed 208,318 new residential homes were approved in the year to September 30, below the 240,000 annual pace needed for Labor's Accord target. Monthly approvals rose 5.1 per cent to 17,948 in September, but fell 0.8 per cent over the year, which Westpac economist Luka Belobrajdic called a bad sign.
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Developers Warn Rate Rises and Budget Taxes Could Stall Home Building Approvals
Property developers fear that rate rises and sharp falls in home prices will worsen Australia's housing supply crisis. Australian Bureau of Statistics data show 208,318 new residential dwelling applications were approved by councils and state governments in the year to September 30. The annual pace of approvals remains well below the target set under Labor's National Housing Accord. Experts warn that the government's Budget taxes could further weigh on builders and investors. The data suggest that any recovery in approvals remains fragile.