The construction of new residential dwelling starts in the ACT is predicted to fall from 5,810 in 2022 to 5,000 in 2024, as shown in Master Builders Australia’s (MBA) forecasts released this week.
Numbers are expected to recover to 6,000 in 2026 but MBA ACT CEO Michael Hopkins says the predicted level of residential construction is not sufficient for Canberra’s forecast population growth.
The report forecasts the total construction activity in the ACT will average $3.8 billion each year until 2026 with a sustained local workforce of at least 20,000 workers.
The greatest contraction this year will be experienced within commercial construction and is expected to recover each year.
Significant infrastructure projects, including Light Rail Stage 1, will see civil and engineering construction activity fare the best, growing to $972.7 million in 2024.
Mr Hopkins says the speculated drop in dwelling starts reflects widespread and ongoing inflationary pressures and labour shortages.
“Local residential construction is being constrained by the ACT’s tight land market, slow land release policies and bottlenecks in the planning approval process,” he says.
“With the Territory already facing chronic housing shortages, the construction industry will be looking to the release of the draft Territory Plan later this year for planning reforms which remove the approval barriers that exist for [the] construction of new housing, especially in established suburbs.”
He says reforms across many other parts of the country that encourage a range of housing types located close to services and infrastructure in established suburbs are commonplace yet building dual occupancies on RZ1 blocks in the ACT remains contentious.
“If the ACT is unable to tackle housing reform with urgency, we will not only fail to house our future population but make it harder for businesses to attract skilled works, which will ultimately impact the ACT’s economy,” Mr Hopkins says.
“The forecasts have been released at a time when the construction sector is under severe stress recovery from COVID lockdowns, supply chain disruptions and workforce shortages, while also trying to adjust to a substantial national and ACT reform agenda for the industry.”
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