Construction times for houses have grown by 50 per cent in the last decade, building costs 53 per cent more expensive, IPA finds

News.com.au

10 hours ago

Construction time for an average home has increased by a whopping 50 per cent in the past year, with Australia's ambitious 1.2 million homes target already 55,300 homes behind just one year in.
While a house took about 8.5 months to build from approval to completion in 2014, it took an average of 12.7 months in 2024, data compiled by the Institute of Public Affairs has revealed.
Costs for building materials had also increased by 53 per cent in the same period.
Construction times increased across the board in 2021 as a result of supply-chain issues during the Covid pandemic.
The lacklustre figures come as Australia marks one year into the five-year National Housing Accords, in which states and territories must build a combined 1.2 million well-located homes by June 30, 2029.
The Commonwealth government has also encouraged states and territories with a $3.5bn funding pot as a carrot for reaching the goal.
Using building activity data from the Australian Bureau of Statistics (ABS), the IPA found Western Australia was leading the construction lag, with an unenviable increase of 85 per cent to 17.8 months. Building costs have also increased by 45 per cent.
South Australia had the next slowest builds of 15.8 months, a hike of 74 per cent, with cost going up by 51 per cent.
Over 10 years, the cost of materials had increased by 58 per cent in both NSW and Queensland, where it now respectively takes 12.7 months and 10.2 months to build a detached home.
It takes 11.3 months to build a home in Victoria, and 12.6 months to complete a home in Tasmania, with material prices increasing by 56 per cent and 55 per cent.
IPA research director Morgan Begg said it was 'little wonder' that Australia was in a housing crisis, with the 'unprecedented demand' for housing being exacerbated by increased construction time and costs.
'The federal government's National Housing Accord will mark its first-year anniversary being tens of thousands of homes behind schedule, as red tape strangles new home builds, with construction times ballooning by 50 per cent,' he said.
'Home ownership is fundamental to the Australian way of life. It gives people a stake in our country and provides long-term financial security for families.'
Mr Begg said 'all levels of government must do their part to fix this crisis,' highlighting action points like reducing migration, urging state and local governments to open up more land and cut red tape to boost construction.
'Over the past decade Australia has seen demand-driven cost increases to construction material and labour caused by large, inefficient government projects, creating the perfect storm of rising prices and rents, particularly in the post-pandemic period,' he said.
'Across the board, the latest figures reinforce the depth of Australia's housing crisis, brought about by out-of-control migration intakes, a construction sector burdened by red tape, and competition for resources from large, expensive, and inefficient taxpayer-funded projects.'
Coalition housing spokesman Andrew Bragg said the housing targets were a 'dead duck,' adding that completed dwellings had dropped by 1 per cent over the last 12 months, according to the ABS.
'A year since Labor's Housing Accord 'officially began', building approvals and activity have gone backwards,' he said.
'Labor is more interested in announcing targets and building bureaucracies than actually erecting any homes.
'Labor's actions show they don't support private developers and builders. They think they know better. No wonder the construction industry has consistently led the nation in insolvencies.'
Housing Minister Clare O'Neil has previously said reducing the 'thicket of regulation' around building homes will be a key priority in Labor's next term of government.
As of June, the Hotham MP will also oversee planning policy after she inherited it from the the treasurer's portfolio.
A spokesman for Ms O'Neil said on Tuesday Labor had been 'very frank' that building homes both costed too much and took too long.
He said Labor was focused on 'working closely with all levels of government and builders to try and fix that,' while also 'increasing productivity, encouraging the building sector to look at more modern methods of building and improving planning pathways and removing red tape'.
'The Liberals can run their mouths, but the reality is they haven't put forward a single legitimate proposition that would increase the number of homes being built in Australia – in fact, their solution was to rip billions of dollars from funding for tens of thousands of social and affordable homes,' he said.
'Talk to anyone who knows the residential building sector and they will tell you that structural reform takes time, and building homes takes time, and the Commonwealth is doing that work. In contrast, the Liberal Party didn't touch that work in their last decade in office.'