Developers Refuse to Build Amid Interest Rate Hikes and Construction Costs

Australia's housing crisis is deepening as property developers refuse to proceed with major projects due to rising interest rates, record construction costs, and plunging buyer confidence. With the Reserve Bank's latest interest rate hike adding further pressure, developers are struggling to make their projects viable.

Scott Beynon, managing director of Proline Building Commercial, warned that property development feasibility is collapsing across the board. 'There's a lot of developments, a number have been approved, but developers aren't hitting the button to proceed,' he said.

The federal government's ambitious target of 1.2 million new homes by 2029 is now in jeopardy as Master Builders Australia estimates that the country will fall short of its targets by around 62,000 homes this year and a total of 262,000 by the end of the national housing accord.

RBA governor Michele Bullock acknowledged the risk following Tuesday's decision to lift the cash rate. 'We have a structural under supply of housing,' she said.