Fresh data from the Australian Bureau of Statistics (ABS) revealed new dwellings greenlit for construction climbed to a seasonally adjusted 5.5% on the back of elevated apartment approvals.
"The rise in approvals in May was driven by private sector dwellings excluding houses which rose 16.3%," ABS head of construction statistics Daniel Rossi said.
Private sector houses also went up by 2.1%.
The total number of approvals in May was the highest since November 2023.
Despite the bounce, the 14,175 dwellings approved across the country still lagged behind the monthly run rate of approvals required to meet the government's lofty goal to revive Australia's dwindling housing construction.
The starter gun was fired on 1 July for the Housing Australia Future Fund's target to build 1.2 million well-located homes over the next five years.
This means 20,000 homes must be built monthly - or 240,000 annually - to achieve this goal.
By comparison, the annual run rate pre-pandemic was 177,000.
"If we want to hear our national anthem on the podium in 2029, we need to move from 170,000 homes a year now into the high 200,000s to average 240,000 over the five years," Property Council chief executive Mike Zorbas said.
However, given the current pace of approvals for new dwellings, it seems more boosters are needed to beat the headwinds.
Dwellings approved totalled 164,000 in the 12 months to May.
"The low approval numbers indicate a slow start to building 1.2 million homes over the next five years," Housing Industry Association (HIA) chief economist Tim Reardon said.
Zooming into the figures, Mr Reardon said approvals in the three months to May were in fact down by 1.5% compared to the same period last year.
The HIA economic chief believes a multi-level approach is needed to address Australia's housing supply shortage.
"Addressing tax, planning, land and regulatory constraints will be necessary to increase the supply of homes in Australia," he said.
Queensland to review state taxes, fees to boost housing supply
The Queensland government has recently launched a review into housing taxes and fees as it scrambles to find solutions to its dwindling housing supply and chronic affordability crisis.
"Given current housing market constraints, now is the right time to develop and undertake a review of the impact that state taxes and charges have on housing supply and the property sector," Treasurer Cameron Dick was quoted as saying.
Following last month's state budget, first home buyers in Queensland are exempt from paying stamp duty on houses sold for less than $500,000, with partial concessions up to home values of $800,000.
Prior to the threshold lift, the value cap was $700,000.
"This review will need to consider potential unintended consequences that changing settings could have on property prices," Mr Dick added.
Even in the face of high interest rates, home prices in Queensland have persistently risen in recent years.
Reports showed the median housing value in the state's capital is close to hitting $860,000, with forecasts indicating it will end the 2025 financial year at $999,000.
The Real Estate Institute of Queensland (REIQ) welcomed the review but cautioned against its impact on investor sentiment.
"It's promising that the goal of increasing housing supply has been identified as the focus of this review into state-based taxes and charges for the housing market," REIQ chief executive officer Antonia Mercorella said.
"However, we know that ambiguous announcements such as these can rattle the confidence of the investment community and destabilise the property market.
"Moreover, it can have an impact on the commercial property sector which flows on to employment opportunities for the Queensland community."
While the examination will not occur until after the state election in October, the real estate body calls on the government to hold off any plans to impose new or increased property taxes on investors, owner-occupiers, small businesses, or developers.
Queensland recently imposed an increased surcharge rate of land tax for foreign companies and trustees, which property stakeholders fondly call "apartment killer taxes".
From 1 July, the land tax surcharge has gone up from 2% to 3%, while ex gratia relief is offered for foreign entities whose commercial activities make a significant contribution to the state economy.
State governments overhaul stamp duty, land tax measures
In addition to the Sunshine State, other Australian states and territories also rolled out updated policy measures on stamp duty and land taxes.
SA
A sweeter deal for first home buyers in South Australia was delivered last month when the state government abolished the value cap on stamp duty concessions. Previously, SA stamp duty concession was limited to homes valued at up to $650,000.
WA
Western Australia likewise lifted its stamp duty exemption threshold from $430,000 to $450,000 for first home buyers.
ACT
ACT expanded its Home Buyer Concession Scheme (HCBS) income eligibility threshold from $170,000 to $250,000.
Tasmania
Tasmania was the latest to announce changes to its stamp duty relief for first home buyers, increasing the value cap to $750,000 from $600,000, estimated to save first home buyers at that threshold nearly $29,000.
The concession applies to homes purchased from 18 February 2024.
Victoria
Meanwhile, Victoria's 2024/25 budget introduced a standalone land tax exemption for lots used for social and emergency housing.
The land tax exemption also applies to charity-owned land that will be occupied by a social or emergency housing development.
NSW
The New South Wales Government has also increased the land tax surcharge for foreign owners of land in the state, up from 4% to 5%.
Photo by Evening Tao on Freepik
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