Property experts have warned that lengthened build times for new Aussie homes will have a worsening effect on Australia’s housing crisis.
Recently released data from the Australian Bureau of Statistics has highlighted extended construction times for houses, townhouses and apartments nationwide, continuing a concerning trend for home build times.
Analysis shows house construction times from approval to completion jumped 13.7 per cent since the 2021-2022 financial year.
Meanwhile, townhouse construction times have increased by 10 per cent since the same period.
And while the national average for apartment builds has decreased by 4.3 per cent, some states, such as Queensland, have seen extensions of 25.4 per cent in the last year alone.
Master Builders Australia Denita Wawn said the unneeded red tape and poor government decisions had continued to make build times worse.
“Over recent years, the delivery of the new homes we desperately need has been obstructed by the combination of labour shortages, broken supply chains and other Covid restrictions,” she explained.
“This is on top of the already formidable set of impediments in the form of planning delays, insufficient land release and red tape.”
“These unnecessary delays to construction ultimately drive up the cost of building, which has already faced inflationary challenges with building product prices and a tight labour market.”
That rise in building costs is set to have a domino effect on the property market, increasing prices for buyers and renters alike.
Delays add to Queensland and Western Australia’s property pains
The data is part of a continuing trend concerning construction times nationwide, with house builds taking 30 per cent longer than they did just over a decade ago.
Unsurprisingly, the states most impacted by the housing crisis have seen some of the most significant extensions in the time it takes to construct a new home, with homes in Western Australia taking 59 per cent longer to complete than they did in 2010.
Currently, new homes in WA take twice as long to complete as the national average among the remaining states and territories.
Meanwhile, Queensland houses are taking 42 per cent longer to complete than in 2010, with apartments now taking half a year longer than they did in 2021-2022.
Queensland property strategist Ardy Maulana told Build-it the continued increase in build times spelt bad news for those hoping for a fall in the property market.
“Lengthening build times is just going to increase property prices in the end,” Mr Maulana said.
“It all comes down to supply and demand. When there’s limited stock, people are willing to pay more to get the property.”
The property acquisitions specialist explained to Build-it that developer financing issues heavily impact Queensland’s apartment build delays.
He told Build-it: “You have developers who are good with money and have the cash immediately available to start the build.”
“But there are others who need up to 70 per cent of the apartments to be sold before the bank finances the development.”
“That can take up to two years to sell the required amount before they can start building.”
National targets impossible without reducing build times
Master Builders warned the government’s housing target of 1.2 million new homes in five years would be impossible to achieve without a reduction in build times and blamed the rise in material costs as one of the largest contributors to the lengthenings.
“To realistically achieve this goal, we need to reduce the time it takes to build,” Ms Wawn said.
“Since the pandemic, building product prices have increased 33 per cent and 4.4 per cent in the last 12 months.”
“While we are seeing a stabilisation of some building product prices primarily around steel, some products such as cement continue to escalate.”
Ms Wawn says the industrial relations bill currently before the Federal Parliament would see those costs continue to rise, further impacting build times.
“Getting a home built on time and budget should be a priority for everyone,” Ms Wawn said.
“There are fundamental questions governments should be answering before passing legislation: will this address the cost of living or housing crisis, will this keep people businesses open and people employed, will this improve productivity and economic growth?.”
“We can’t see a ‘yes’ for any of these questions.”
