According to the latest PropTrack New Homes Report, Australia’s housing market is facing a complex landscape of challenges and opportunities, as it revealed a concerning trend of declining new building approvals amidst a growing demand for new housing developments.
The total building approvals dropped by 9.5% in December, following a modest rise of 0.3% in November.
The decline was marked by a 25% decrease in unit approvals and a 0.5% decrease in house approvals. Since peaking in March 2021, approvals have been on a consistent downward trajectory, raising concerns about meeting the government’s target of facilitating the construction of 1.2 million new homes by 2029.
The decline in approvals has naturally led to a decrease in new commencements, with houses seeing a 9.7% drop and units an 11.2% fall.
Despite the gloomy outlook in approvals and commencements, the listings for new developments on realestate.com.au offer a silver lining.
While total new build listings are down by 1%, apartment listings have seen a 7% increase year-on-year, and retirement property listings have surged by 43%.
However, new house and land listings have slightly decreased by 4%, with variations across states. NSW, TAS, and QLD have experienced a significant rise in listings. Conversely, WA saw a substantial drop in house listings, while SA and VIC each witnessed a modest decline.
Listings for retirement properties have surged in the past year, with New South Wales, Queensland, and Victoria reporting increases of 77%, 35%, and 27%, respectively. Melbourne has seen a notable rise with an additional 267 apartment listings (18%) now available, and there’s been a slight uptick in apartment listings in both Queensland and South Australia.
The majority of apartment developments are concentrated in high-density cities, especially in inner Melbourne and Sydney, with the Gold Coast also featuring prominently with the second-highest number of developments, accounting for 10%.
Leading in apartment projects are the suburbs of Southbank and the Melbourne CBD, along with Surfers Paradise on the Gold Coast. In contrast, Sydney’s Macquarie Park and Castle Hill are notable for being significantly further from the city center.
The majority of house and land listings are found in metropolitan areas, predominantly located in the outer suburbs of Melbourne, Sydney, and Brisbane. Additionally, there are 17 projects in Geelong, situated an hour away from Melbourne, in regional Victoria.
In January, the suburb with the highest number of house and land development listings was Box Hill, located in the Baulkham Hills and Hawkesbury area of Sydney. Presently, there are 11 sites in the suburb, with each property listed on the market for over $1 million.
Among the top 10 suburbs for development listings, eight are located in Victoria. Notably, Clyde North (in Melbourne's South East), Armstrong Creek (near Geelong), and Fraser Rise (in Melbourne's West) each boast the second-highest number of developments.
Engagement with new development listings on realestate.com.au in January rose by 15% compared to the previous year, with retirement listings experiencing the most significant increase, up 20% year-on-year.
Buyer engagement for house and land listings is also up 19%, marking nine months of positive growth. However, engagement with apartment listings showed a modest increase of 1%.
Apartment enquiries are most concentrated in Inner Melbourne and the Gold Coast, coinciding with the areas that have the highest number of listings. All of the top 10 regions generating the most enquiries are located in inner-city areas.
For house and land developments, Logan - Beaudesert in Brisbane received the highest number of buyer enquiries in January, with Perth - North West and Sydney's Baulkham Hills and Hawkesbury areas following in demand.
In January, an apartment development in Urangan, Hervey Bay, emerged as the most sought-after project, attracting twice as many enquiries as the runner-up.
The Topaz Shelly Beach apartments, priced between $599,000 and $1.5 million, offer stunning ocean views.
Meanwhile, Logan - Beaudesert hosted three of the top 10 most inquired about house and land developments. Yet, the most popular development was SkyRidge in Worongary, located on the Gold Coast.
The PropTrack New Homes Report underscored the critical challenge facing Australia’s housing market.
“The biggest challenge for the housing market in the coming year is how quickly stock levels can be increased to provide additional housing for the growing population,” said Karen Dellow (pictured above), senior data analyst for PropTrack.
“Rental properties are also needed, in large quantities, to meet the needs of overseas migrants and students; however, investors are still not returning to the market in the numbers needed to meet the demand.
“However, with existing stock in short supply, buyers may be looking at new builds as an alternative, and an increase in demand may spearhead an increase in new approvals.”
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
