Skip to main content

Regional Economic Development

HIA economist says building approvals were up for 2024-25

“NEW home building approvals in the 2024/25 financial year were up by 13.9 percent compared with their 2023/24 trough,” Housing Industry Association (HIA) senior economist Tom Devitt outlined as part of his recent market assessment.

The Australian Bureau of Statistics has just released its monthly building approvals data for June 2025 for detached houses and multi-units covering all states and territories.

“Detached house approvals increased by 6.1% in the financial year, while multi-unit approvals were up by 27.9%,” Mr Devitt said.

“Strong population growth, tight labour markets and recovering household incomes helped improve confidence in an increasing number of markets over the last 18 months, led by Western Australia, Queensland and South Australia.

“Interest rate cuts from the Reserve Bank in February and May this year, with the expectation of more to come, will help bring more potential homebuyers back to the market in the lagging – and often more expensive – states and territories.

“The challenge will be turning this modest improvement in conditions into the kind of recovery that will meet the Australian Government target of 1.2 million homes over five years," Mr Devitt said. 

“In the 2024/25 financial year, the first year of the government’s five year target, Australia approved just 187,330 new homes. Given that some approved projects don’t ever commence construction, the goal of commencing 240,000 homes per year remains a distant goal.

“Even with lower interest rates, Australia is set to start just 200,000 homes per year, on average, over the next four years.

“Multi-unit activity, in particular, needs to do more heavy lifting. Multi-unit commencements need to double from current levels in order to achieve the government’s housing targets.

“This is unlikely to occur under current policies. Labour and land shortages, obstructionist regulations and punitive surcharges on institutional investors have pushed improving sentiment away from apartments back into the detached housing sector.

“Sustained improvement in multi-units activity will need to come from a reduction in policy burdens on the sector, or a re-acceleration of home prices until new projects are viable against higher policy costs, the latter not boding well for affordability,” Mr Devitt said.

Total new dwelling approvals in the 2024/25 financial year, in seasonally adjusted terms, increased in Western Australia by 32.3% and South Australia by 28.7%, followed by New South Wales (+16%), Queensland (+13.1%) and Victoria (+9.1%).

Tasmania declined by 9.9% In original terms, the Northern Territory increased by 22.5% while the Australian Capital Territory declined by 39.9%.

www.hia.com.au

 

ends

CAs say bold productivity reforms needed: start with tax overhaul

CHARTERED Accountants ANZ (CA ANZ) is adamant that bold tax reform is needed to boost Australia’s productivity.

CA ANZ is part of the coalition of 27 groups representing small, medium and large businesses, universities and the investment community, led by the Business Council of Australia, which delivered a joint submission to the Economic Reform Roundtable.

said the Joint Group of Industry Associations has outlined four priority areas to boost Australia’s economy ranging from the practical to the ambitious.

In addition to its input into the BCA-led submission, CA ANZ also made a separate submission to Treasury on the Economic Reform Roundtable on behalf of its more than 140,000 members, which outlines about 40 recommended actions including mandating digital reporting.

“Australia’s tax architecture is overdue for renovation,” Ms van Onselen said. “Let’s build a system that encourages rather than hinders investment into Australia, rewards innovation and supports sustainable growth.

“We need a tax system that powers productivity, not one that penalises progress – be it individuals or business. Reform must be bold, broad and built for the digital economy,” Ms van Onselen said.

“That said, there are immediate actions the Federal Government can do to get things moving on the productivity and economic front – and CA ANZ strongly believes that this should be mandating digital reporting.

“Digital reporting is the low-hanging fruit of productivity and economic reform. Ninety percent of the world’s major economies already do it, streamlining compliance and unlocking real-time insights that drive smarter decisions. So, it’s time for Australia to catch up,” Ms van Onselen said.

CA ANZ’s full submission to the Economic Reform Roundtable can be downloaded here: 20250725_Economic Reform Submission_CA ANZ.pdf

www.charteredaccountantsanz.com

ends

HIA outlook: Home building to rebound with interest rate cuts but long-term challenges remain

HOME CONSTRUCTION commencements across Australia are set to increase over the next few years, driven by strong population growth, low unemployment, and falling interest rates.

However, long-term structural issues continue to pose risks to housing affordability and national supply targets, according to the latest outlook from the Housing Industry Association.

HIA chief economist Tim Reardon said the sector is showing signs of improved confidence following a period of weak activity, particularly in apartment construction. 

“We expect new home commencements to increase steadily through the second half of the decade,” Mr Reardon said.

“Detached house building will lead this recovery, peaking in 2027, with apartment construction set to follow as market conditions and policy settings improve.”

Recent interest rate cuts and historically strong migration are adding to demand for new housing, he said. But ongoing constraints including land shortages, regulations and taxes are increasing the cost of construction and limiting supply. This would continue to drive up the cost of both renting and buying a home.

“The only way to close the growing gap between supply and demand is through meaningful reform—particularly at the state level,” Mr Reardon said.

Building to fall 20%  short

The HIA report forecasts that home building will fall 20 percent short of the Australian Government’s target of 1.2 million new homes over the five years.

“We need to unlock land, streamline planning processes, and remove barriers to investment if we are to meet the housing needs of a growing population,” Mr Reardon said.

“Australia has the capacity to deliver, but it will take a coordinated response from all three tiers of government to overcome these constraints.”

While detached housing is showing strong growth in Western Australia, South Australia, and Queensland, activity remains subdued in New South Wales and Victoria.

Apartment construction is yet to recover from a collapse in foreign capital caused by punitive state taxes and is expected to rebuild gradually towards the end of the decade. This growth will be boosted by ongoing demand from migration and Olympic focused building in Brisbane.

“Housing demand is not going to decline with a rise in interest rates,” Mr Reardon said.

“It is continuing to grow along with the population. Structural reforms are needed now to shape affordability, economic opportunity and living standards for the next generation.”

HIA’s outlook on housing construction markets

Detached houses: There were 26,880 detached houses that commenced construction in the December quarter 2024, which brought the 2024 calendar year to 107,240 detached starts, up by 7.0% compared with the previous year. This increase is expected to continue with a further 3.7% in 2025 to 111,240, and 6.7% increase 2026 to 118,660 and to a peak in 2027 of 120,910 starts. Detached starts are then expected to fall as the cost of land and rising borrowing and construction costs see households shift demand to unit construction, seeing starts fall to 108,240 in 2030.

Multi-unit dwellings: There were 15,390 multi-unit dwellings that commenced construction in the December quarter 2024, which brought the 2024 calendar year to 60,940 multi-unit starts, the lowest in 13 years. This is expected to be the trough of this cycle with the number of multi-unit starts increasing to 68,850 in 2025. A further 9.6% increase in 2026 will still see multi-unit commencements remain anaemically low at 75,450. From this point, capacity constraints should ease, while demand continues to exceed supply, resulting in an additional 13.0% increase in starts in 2027 to 85,250. This expansion should continue and exceed 100,000 starts in 2029 for the first time since 2018. From this point, the increase in multi-unit starts will ease.

www.hia.com.au

Click here to purchase HIA State and National Outlooks

 

ends

Focus on city labour market jobs decline – Jobs and Skills Report

METROPOLITAN labour market conditions are easing compared with regional areas, according to the just-released Better Together: Jobs and Skills Report 2024.

Whereas conditions in regional areas improved on average in the lead up to June 2024, metropolitan areas such as Sydney are faring less well.

“The devil is in the details,” Jobs and Skills Australia (JSA) Commissioner, Professor Barney Glover said.

“Overall analysis of regional labour market indicators shows that the regions are often weaker than cities.

“But when you get into the data, it’s showing a downward trend with cities, notably that 13 city areas had a decline in labour market rating whilst only four regional areas declined over the same period.”

Other comparisons tell a similar story. The average unemployment rate for metropolitan and regional city areas increased by 0.4 percentage points over the year to June 2024 compared with an increase of 0.1 percentage points in regional areas.

Similarly, the average working age employment rate in cities fell by 0.3 percentage points of the year, but it increased in regional areas by 0.5 percentage points.

“That’s why we’re taking our report on the road, to make sure that people are understanding what the data is showing and also that we’re hearing from people on the ground about what data and analysis is most useful to them,” Commissioner Glover said.

JSA is taking its roadshow to all capital cities as it meets with stakeholders and interested members of the public to discuss the Better Together: Jobs and Skills Report 2024, JSA’s annual compendium of its most interesting insights.

The Jobs and Skills Australia national roadshow will visit each state capital in November and December, with staff providing an overview of the latest analysis of the training and workforce sectors. 

www.jobsandskills.gov.au

ends

Home building approvals hit 15-month high – Master Builders

BUILDING APPROVALS rose by 4.4 percent in September and 6.3 percent over the quarter, indicating a recovery in the home building market, according to new Australian Bureau of Statistics (ABS) figures. But Australia’s builders say it is all still lagging badly.

Master Builders Australia’s chief economist Shane Garrett said there’s still a long way to go to meet the Housing Accord’s goal of 1.2 million new homes.

“September saw a 2.4 percent increase in detached house building approvals while those for higher density homes rose by 8.4 percent.

“Total dwelling approvals are now 6.8 percent higher than a year ago. 

“Over the same period, detached house approvals have expanded by 16.3 percent.

“For new home building approvals, September was the best month we’ve seen since May last year,” Mr Garrett said.

“Detached house building approvals enjoyed their strongest month since August 2022.

“Home building approvals seem to be finding some momentum – but the challenge of ending the housing crisis is still formidable.

“The past year has seen less than 168,000 new homes approved for building, well below the 240,000 homes needed per year.

“More action is still needed to bring down the high costs and timelines associated with building to encourage even more people into the new home building market,” he said.

“Addressing labour shortages, speeding up planning approvals, ending housing legislative stalemates in the Senate are some examples of how to improve the investment environment in new home building,” Mr Garrett said.

www.masterbuilders.com.au

ends

New home sales up by 11% on last year – HIA

THE HOUSING INDUSTRY ASSOCIATION (HIA) has identified a rise of 11 percent in new home sales over the same period past year.

“Sales of new homes in the three months to July 2024 were 11.1 percent higher than at the same time last year,” HIA economist, Maurice Tapang said.

The HIA New Home Sales report is a monthly survey of the largest volume home builders in the five largest states and is a leading indicator of future detached home construction.

“New home sales fell back marginally by 4.1 percent in July, however sales this year remained stronger than at the same time in the previous year,” Mr Tapang said. 

“This is consistent with our expectations that detached home building will pick up pace in the second half of 2024.

“Queensland saw a 15.6 percent increase in new home sales in July 2024 compared to the previous month. This leaves sales over the past three months 60.1 percent higher than at the same time the previous year,” Mr Tapang said.

“Sales in South Australia were 55.8 percent higher in the three months to July 2024 than at the same time in the previous year, despite a monthly decline.

“New home sales in Western Australia remain elevated, despite a fall in recent months, as this market is constrained only by the capacity of the industry, not demand.

“Sales of new homes in New South Wales and Victoria are continuing to bounce along the bottom of their respective cycles,” he said.

“The rise in interest rates hurts these markets, particularly in Sydney and Melbourne, more significantly due to the higher costs of land.

“These sales figures suggest that the improved number of homes commencing construction across Australia will be driven by smaller markets outside of Sydney and Melbourne.”

New home sales in the three-month period to July 2024 increased in Queensland by 60.1 percent compared to the same time in the previous year, followed by South Australia (+55.8%), New South Wales (+17.5%), and Western Australia (+1.4%) which is coming off a higher base. Victoria recorded a 13.3 percent decline over the same period.

www.hia.com.au

 

ends

FCA backs ASBFEO plan to support Australian small and family businesses

THE Franchise Council of Australia (FCA) has commended the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) for its comprehensive recommendations to support the growth and success of small and family businesses across Australia.

Many of these recommendations would bring immediate benefits, starting with the proposed tap-and-go reforms, according to FCA CEO, Tanya Robertson.

This particular reform would mandate banks and other providers to charge the lowest fee for tap-and-go and have dual-network debit card transactions as the default, saving businesses around $1 billion a year.  

“We wholeheartedly applaud the comprehensive recommendations put forward by the Australian Small Business and Family Enterprise Ombudsman,” Ms Robertson said.

“These steps will provide much-needed relief and support to our member businesses, which are the backbone of our economy. The tap-and-go reforms, in particular, represent a significant cost-saving measure that will directly benefit our members.

“We are committed to ensuring these recommendations are actioned, and we will be writing to the Australian Banking Association to advocate for immediate implementation of the tap-and-go reforms. These initiatives will not only support our current businesses but also encourage future entrepreneurs to invest in their dreams and contribute to Australia's economic prosperity,” Ms Robertson said.

“Additionally, it is vital to recognise the importance of an ongoing review of the regulatory and legislative framework governing business. Ensuring that the right balance is struck between necessary oversight and allowing businesses the freedom to innovate and grow is essential for the continued health and vibrancy of our economy.

“The FCA will continue to advocate for policies that foster a supportive and dynamic business environment.”

Key recommendations from ASBFEO Include:

  1. Tax discounts for new businesses: Explore a tax discount/offset scheme for new business owners to allow reinvestment of income during the critical first three years.
  2. Right-sized regulation: Focus on regulation that helps and supports business owners in meeting their obligations without the resources of big businesses.
  3. Business impact statements: Require every Cabinet submission, regulatory impact statement and new policy proposal to include a business impact statement.
  4. Prime Minister’s Business Awards: Establish awards to recognise and celebrate excellence and inspire the next generation.
  5. Affordable legal alternatives: Create a Federal Small Business and Codes List in the Federal Circuit and Family Court of Australia for affordable and effective dispute resolution.
  6. Government contracts access: Simplify rules and practices to give businesses a greater chance to compete for government contracts.
  7. Mandatory lowest fee for tap-and-go: Make it mandatory for providers to charge the lowest fee for tap-and-go transactions, significantly reducing costs for businesses.
  8. Accessible insurance: Ensure essential insurance for businesses is understandable, accessible and affordable.
  9. Ban unfair trading practices: Ban practices that distort competition and harm businesses.
  10. Fair Work Commission Division: Create a Small Business Commissioner and Division within the Fair Work Commission to address the specific circumstances of smaller employers.
  11. Digital platform dispute resolution: Standardise procedures for timely business dispute resolution with digital platform providers.
  12. ‘Good business pays’ recognition: Honour businesses that meet workplace, tax and payment obligations promptly with a recognition and accreditation program.
  13. Digital learning and support: Expand digital learning and support focused on business systems, technology deployment and practical uses of generative artificial intelligence.
  14. Central resource hub: Develop an accessible central resource hub with actionable information, guidance, programs and assistance for businesses.

About the Franchise Council of Australia

The Franchise Council of Australia (FCA) is the peak industry body for franchising in Australia, representing both franchisors and franchisees. www.franchising.org.au

 

ends

 

More Articles …