Master Builders Australia, the peak body for the building and construction industry is urging the government to work with all stakeholders and facilitate reform of illogical developer charges, improve land release strategies and streamline the approvals process to remove impediments affecting the supply of housing.

According to Master Builders, a third consecutive fall in building approvals highlights the tenuous outlook for residential building.

Mr Peter Jones, Chief Economist, said “There is no sign of the much needed upswing in residential building activity as householders remain cautious and fearful about further rate rises.”

He said, “Master Builders’ latest survey reveals builders have become pessimistic as forward indicators turn sour and financial and other regulatory constraints continue to affect activity.”

“The interest rate-sensitive residential building industry is relying on an extended pause in the Reserve Bank monetary policy to shore up consumer sentiment and encourage an upswing.”

Mr Jones said, “Government action is needed to remove impediments that are suppressing housing supply, forcing up prices and worsening housing affordability.”

“Given the underbuilding of the past seven years, approvals need to lift by half if the level of residential building is to make any inroad into an ever-increasing supply shortage.”

“Artificially high barriers to the purchase of new or newly built houses in the form of unchecked and inefficient developer levies are a major issue holding the industry back.”

According to him, government policies are constraining the industry’s ability to meet the housing needs of the population and without reform, the problem of housing affordability will only get worse.

“Reputable commentators including the Productivity Commission, Housing Supply Council, Henry Tax Review and the Reserve Bank have all stated that unless there is urgent reform to address bottlenecks the strong supply response needed to meet Australia’s housing shortage will not eventuate,” he said.