Sunshine Coast building approvals have surged even as Queensland’s construction industry warns that rising materials costs and supply chain disruptions are increasing pressure on builders and small businesses.
The latest figures, from the Australian Bureau of Statistics, showed approvals were up 35 per cent in the region, despite a plunge of 2.9 per cent across the state in the three months to February.
Master Builders Queensland regional manager Nicola Scott said the area’s remarkable increase was due to a focus on luxury apartment blocks.
“The figures for the Sunshine Coast region are up thanks to a large surge in approvals for units,” she said.
“This is the same as what we have been seeing in Brisbane and the Gold Coast, where high-end unit developments have been booming.
“In the face of an untapped demand for housing and rising construction costs, this is the one area of the market where developers have been able to get their feasibilities to stack up and move ahead to construction.”
Approvals for Sunshine Coast houses dived 22 per cent to 396, but approvals for units skyrocketed 159 per cent to 566.
Approvals were up 39 per cent at lifestyle destination Noosa, including houses (29 per cent) and units (57 per cent).
Statewide approvals for houses and units were down 1.9 per cent and 4 per cent respectively.
While approvals rose locally, Ms Scott was uncertain whether the trend will continue.
“It is very difficult to predict the future and what approvals will look like moving forward,” she said.
“Our industry is navigating soaring fuel and materials costs, rising interest rates and the resulting hike in the cost of living.
“We are once again in the unknown space we found ourselves in during the pandemic, and the problems facing the Sunshine Coast are the same everywhere else in Queensland.
“In the short-term, we are also hearing reports of a significant drop in the number of clients who are prepared to sign new contracts due to the uncertainty created by the fuel crisis.
“This will impact the long-term outlook, as demands for new builds dry up.”
Over the past year, approvals for Sunshine Coast houses slipped 0.6 per cent and approvals for units increased by 5.5 per cent.
Master Builders Queensland issued a statement saying that fixed-price contracts were a key pressure point, with builders and subcontractors increasingly unable to absorb rising costs.
It warned that many businesses are being forced to pass on higher expenses to consumers, while some are already standing workers down as project costs continue to climb.
Chief executive Paul Bidwell said materials prices had risen between 5 and 50 per cent, with the cost of building a new home up by as much as $10,000 to $15,000.
He said growing uncertainty was also leading to fewer clients signing new contracts, which could further dampen demand for new builds.
Mr Bidwell called for greater flexibility in government contracts and support from banks to help manage rising costs and ensure projects are completed.
