Housing approvals in WA drop by 7.5 per cent and put the State's ambitious new homes goal at risk

West Australian

2 days ago

Housing approvals dropped by 7.5 per cent in WA in May, putting them at higher than a year ago but the sluggish numbers mean the State is not on track to build enough houses to meet its target and win extra cash from the Federal Government.
The Commonwealth has put bonus funding on the table for States that meet their share of the 1.2 million new homes five-year housing accord target.
Nationally, building approvals grew by 3.2 per cent in May, but this was mainly driven by strong growth in Victoria and NSW, new data from the Australian Bureau of Statistics showed.
Approvals in WA dropped 7.5 per cent from a month earlier.
Federal Housing Minister Clare O'Neil saw green shoots in the data, with her office saying momentum was building nationally towards the targets.
'These positive trends show we're on the right track, but we'll keep doing the hard work so more Australians have access to affordable, secure housing,' a spokesperson from her office said.
But shadow minister Andrew Bragg said the improvement was 'marginal'.
The Property Council estimates WA will fall about 9.4 per cent short of its target to build about 129,700 new homes by mid-2029 if current building trends continue.
Separate forecasts from the Master Builders show the State will be 3.4 per cent shy of its target – although this would drop to about 12 per cent below if building approval rates don't pick up.
Master Builders WA chief executive Matt Stanton said the State was among the closest in the country to meeting its housing target.
But a hurdle is Perth's long cultural and lifestyle attachment to lower-density living, with apartments and townhouses playing little role in the city's development.
'If we're going to meet demand on housing supply with the fastest growing population of any state and also an economy that's firing pretty close to on-all-cylinders, then we do need a higher and medium density construction … to make up a greater part of new developments moving forward,' he said.
Property Council WA chief executive Nicola Brischetto said approvals too often didn't translate into building actually starting, so the data tended to be a bit volatile.
'The biggest barriers are the availability of builders, cost of construction, and the economic viability of many apartment projects,' she said.
'Workforce continues to be the biggest challenge … It's the physically being able to get stuff done, but also, when you've got a constrained labour market, that will put pressure on prices and drive costs up.'
Ms Brischetto commended the WA Government for having concentrated heavily on easing workforce shortages but said now there also needed to be a focus on boosting productivity, through using more pre-fabricated and modular construction or adopting AI for scheduling and ordering.