WA dwelling approvals up 19pc

Western Australia has reported a 19.6 per cent increase dwelling approvals in May, representing the highest increase of all the states.

Australian Bureau of Statistics’ monthly approvals data shows a 5.5 per cent increase in dwelling approvals nationally, with a total of 14,175 units approved across the country.

In WA, 1,913 dwellings were approved in May, including 1,539 houses.

Building approvals for other housing typologies, mainly apartments, grew by 171 per cent to 374 in May.

Approvals for detached houses in WA were 49 per cent higher than the same time last year, reflecting an increase in the industry’s capacity to build homes.

Housing Industry Association WA executive director Michael McGowan said a lot of that activity was occurring in Baldivis, Byford and Yanchep.

“The demand for new housing is certainly positive but also reflective of the housing challenges that the state is currently facing,” he said.

“Low rental vacancies and an increase in the established house prices are driving owner occupiers, and we are still seeing strong investor interest from the East Coast.

“There is also a growing confidence that the delays and interest rate rises we have seen in the last three years have stabilised.”

Mr McGowan added that the government and industry must continue its focus on attracting skilled labour, de-constraining land and limiting regulation.

The federal government’s target of Australia building 1.2 million homes by the end of June 2029 kicked in on July 1.

Industry has been sceptical about this target being achieved, including the HIA.

HIA national chief economist Tim Reardon said nationally, build approvals were down by 1.5 per cent since the same time last year.

“There have been 163,760 total dwelling approvals over the most recent 12 months to May 2024,” he said.  

“This is well below the 240,000 new homes needed each year from 1 July 2024 to achieve National Cabinet’s goal.

“The low approvals numbers indicate a slow start to building 1.2 million homes over the next five years.”

Meanwhile, global consultancy Arcadis has predicted a 7 per cent rise in construction costs in Perth in 2024.

Arcadis’ latest Construction Market View reports that build costs in Perth are expected to rise at the fastest rate nationally this year, following a stabilisation in price escalations in 2023.

Last year, Perth’s build costs increased by 3.8 per cent, which was the lowest of Australia’s four major cities.

This compared with a 14.3 per cent increase in 2022, the highest of all the states.

Arcadis says labour costs continue to be a significant challenge in WA, as well as an undersupply of housing.