The way to make housing more affordable is to encourage the building of new homes, as higher supply leads to lower demand and therefore lower prices.
However, the number of residential building approvals has been trending down.
A total of 16,455 building approvals were issued in September, which was 5.8% lower than the month before and 13.0% lower than the year before, according to the latest data from the Australian Bureau of Statistics.
In last month’s federal budget, the government set an “aspirational target” to “build one million new well-located homes over five years from 2024”.
Over the five years to September 2022, the number of approvals (1,026,447) exceeded one million. However, not all those approvals will lead to builds, as a certain percentage of home owners and developers always choose not to proceed to construction.
So if the government wants to hit its target and make housing more affordable, building approval numbers need to increase.