Building approvals fall

Australia's new dwelling approvals have reached their lowest level in 12 years, with only 162,892 homes approved in the year ending June, reflecting an 8.5% decline from the previous year. This downturn is largely attributed to high interest rates, rising labor and material costs, and worsening housing affordability, particularly in Sydney. In June alone, total dwelling approvals fell by 6.5%, with private sector house approvals in New South Wales dropping 19%, marking its lowest level since January 2013. Despite government pledges to ramp up housing construction under the National Housing Accord, expectations suggest that the target of 1.2 million new homes over five years may not be met. Economists anticipate that interest rate cuts will be necessary to revitalize the residential construction market, although significant recovery may not materialize until 2025 due to ongoing labor shortages. Overall, the housing sector is facing considerable challenges as it navigates a turbulent economic landscape.