FORECASTS released by Australia’s peak building industry association predict that new residential dwelling starts in the ACT will fall from 5810 in 2022 to 5000 in 2024.

CEO of Master Builders ACT Michael Hopkins said the predictions reflect constraints on local construction caused by Canberra’s tight land market, slow land release policies and bottlenecks in the planning approval process.

“The current and predicted level of residential construction is not sufficient to keep up with Canberra’s forecasted population growth,” said Hopkins.

“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.”

In light of the predictions the MBA says they will be closely watching for the release of the ACT government’s draft territory plan later this year, legislation which proposes overhauls to the current planning system.

Hopkins says if the ACT is unable to tackle housing reform with urgency it risks failing to house future populations and making it harder for businesses to attract skilled workers.

“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 construction of new housing, especially in established suburbs,” he said.

“Reforms which encourage a mix of housing types located close to infrastructure and services in established suburbs have been commonplace for years in many other parts of Australia, yet even building dual occupancies on RZ1 blocks in Canberra remain contentious.” 

The MBA forecasts that new residential construction activity won’t recover for another four years, predicting 6000 new residential dwelling starts by 2026.

“MBA’s forecasts predict total construction activity for the ACT will average $3.8 billion each year to 2026, sustaining a workforce of at least 20,000 local workers,” said Hopkins.

“Commercial construction experienced its greatest contraction in the current year and is expected to recover each year to deliver $1,031.8 million by 2025.

“Civil and engineering construction activity will fare the best growing to $972.7 million in 2024 due to significant infrastructure projects including Light Rail Stage 2.”