Australia's housing supply challenge is deepening as weakening market confidence and falling approvals raise questions about the nation's ability to deliver its housing targets.
New ABS data released this week shows total dwelling approvals fell 3.6% in July to 17,687, with private sector house approvals down 4.2% to 10,199 and private sector dwellings excluding houses down 0.4% to 7,119.
Property Council group executive policy and advocacy Matthew Kandelaars said the housing system could not afford further policy uncertainty.
"Today's approvals data reinforces what the market is already making crystal clear: confidence is weakening and the housing pipeline is under significant pressure," Kandelaars said.
"When confidence falls, fewer projects stack up and fewer homes get built.
"At the very time Australia needs more housing investment, the Federal Government is considering a trust tax that will hurt housing delivery even more.
"Family-owned and mid-tier builders do much of the heavy lifting on housing supply. The proposed trust tax risks hitting exactly those businesses the government is relying on to help deliver 1.2 million homes."
Kandelaars said the data matters when looking at the whole picture.
"Today’s data is a reminder that confidence matters and that Australia will not improve affordability by making housing investment less attractive," Kandelaars said.
"If governments want more homes, they need to improve feasibility, back investment and remove barriers to supply, not create new ones."
