A collapse in new home approvals is set to exacerbate the nation’s rent and housing affordability crisis as Treasury secretary Steven Kennedy warns the Australian economy may have already entered a weak period of growth.
As the Reserve Bank mulls another interest rate rise next week, Australian Bureau of Statistics data showed dwelling approvals dropped another 8.1 per cent in April to 11,594. They have now fallen by more than 24 per cent over the past 12 months.
Commonwealth Bank senior economist Belinda Allen said the sharp drop in approvals for new homes would put even more pressure on the market. According to Kennedy, one pressure point on the rental market has been people moving out of home. He said about 130,000 extra households had been created, compared to the pre-COVID period, because of this phenomenon.
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