The building and construction boom has been great for builders of late, but Master Builders Australia warns that inflation is taking its toll.
MBA CEO Denita Wawn said recent ABS data highlighted the difficulties in supply of materials and labour have on building new home building activity.
“These unfavourable cost conditions helped push new dwelling purchase prices up by 20.4 per cent over the year to October 2022,” she said.
“The large rise in new home costs is one of the main reasons why the inflation rate has risen across the economy.
“There was a 2.2 per cent increase in the total volume of construction work done during the September 2022 quarter. This was largely driven by the solid increase in civil/engineering construction (3.4 per cent) over the quarter.”
Wawn added, however, that there were also gains for both residential and non-residential building, experiencing 1.3 and 1.1 per cent increases respectively across the same period.
She also said that data indicated that home building activity would likely lower in the coming months, which made addressing delays in certain areas vital for governments.
“There was a six per cent drop in the total number of new home building approvals during October 2022 and a particularly sharp decline (-11.3 per cent) in the number of medium/high density dwellings,” Wawn said.
“Governments at a state and territory level must double-down on their efforts to address issues that continue to frustrate the industry like lengthy delays in approvals for land title, development and building applications, and occupation certificates.
“Government must be strategic when it comes to significant policy changes, like the proposed IR Bill, and carefully consider its impacts against a challenging economic backdrop.”