“The continuing housing shortage and population growth has seen the latest building approvals continue their surge to record high levels,” Peter Jones Chief Economist of Master Builders Australia said.

“January’s result was largely driven by a huge spike in approvals for apartments in Queensland while a jump in South Australian approvals will be a boost to that state’s building industry and economy, which are both doing it tough,” he said.

“With last month’s rates cut yet to be reflected, the surge in approvals is primarily driven by the massive undersupply in housing,” Peter Jones said.

“The housing shortfall is driving the deterioration in housing affordability which particularly affects first home buyers. Policy makers must act to ensure that the intergenerational home ownership gap does not widen,” he said.

“While the looming housing boom will see an improvement in the level of new stock there is no room for complacency. Master Builders Pre-Budget submission calls for pragmatic reforms to ensure that continuing supply side impediments do not result in first home buyers increasingly being locked out of the market,” Peter Jones said.