They were little more than political announcements designed to sell the idea that #housingsupply was finally being taken as a serious issue.
In truth, there was not enough industry or market sounding in the lead up to to the announcements to make reaching them a reality. Or, more accurately, the good advice of industry participants on what it would take to get close was mostly ignored.
The tailwinds that led to higher than average approvals and completions in the 2010s, especially in higher-density housing, are gone. Where we had a short, golden period of: ✅relatively faster approvals 💰more moderate costs w/ less government infrastructure competition 📋fewer regulatory hoops 🪙lower taxes & charges 🏗️better productivity 💳lower finance costs
Each of those factors has slowly but surely been eroded, due to the eroneous and, dare I say, jealous idea that builders and developers were making too much money, and governent deserved a bigger share. That, or that the housing being delivered didn’t meet a perfect idealogical expression of how people should live.
So instead, we have: • low approvals • even lower commencements • (still) increasing costs – despite people who should understand such things suggesting otherwise • builders, developers and contractors going broke at record rates
That’s why the average cost of building a new home hit $500,000 in the December 2024 quarter – up from around $300k in 2019.
🤔Unless we deal with those core issues and reverse those changes at a broad scale, new housing supply will continue to languish. And we will see increasingly fewer and fewer homes built, at increasing prices.