Construction Delays: Almost 40,000 Approved Homes Yet to Break Ground Across Australia

Developers have yet to start construction on nearly 40,000 homes with planning approval across Australia, including 11,170 in Sydney. According to KPMG’s recent report, the delay is largely attributed to high interest rates and rising construction costs. As of December 2023, 15,593 approved dwellings in New South Wales were still waiting for construction to commence, a slight improvement from the previous year at 15,818.

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Victoria faces similar issues, with 7,897 dwellings, yet to break ground. Sydney and Melbourne account for nearly half of the nation’s stalled projects, with townhouses and apartments are representing the majority of unbuilt homes. KPMG urban economist Terry Rawnsley highlights the struggle developers face due to increased material costs and financing difficulties, impacting medium to high-density projects.

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Brisbane saw a 3.8% rise in stalled projects, mainly detached houses, while the ACT experienced a near doubling in unstarted approved buildings. Adelaide and Perth remained stable. Jago Dodson, an urban policy professor at RMIT University, notes developers’ conservative approach due to uncertainties in labour, materials, and finance, leading many to pause at the planning stage to avoid risks.

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Efforts by NSW and Victoria to boost housing have yet to show significant impact. The NSW government’s Transport Oriented Development Program aims to rezone land for denser housing near transport hubs. Meanwhile, Victoria’s plans to speed up approvals and rebuild social housing towers aim to deliver 800,000 new homes in the next decade. However, Rawnsley predicts it will take until 2025 for these reforms to impact the market while stabilising interest rates and reduced infrastructure spending might provide some relief.

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Read the full article here https://www.theguardian.com/australia-news/article/2024/may/28/house-construction-lagging-behind-planning-approval-australia-interest-rates-building-costs