What the latest home building data tells us

The latest building approvals show more new homes are getting the green light, with new apartments driving the highest level of approvals since December 2022. According to data from the Australia Bureau of Statistics, a total of 16,580 residential dwellings were approved in January 2025, a 6.3% increase from December 2024.

In the three months leading to January, approvals were 14% higher than the same period the previous year. “Approvals for private dwellings excluding houses, drove the overall rise, up 12.7%, to the highest level since December 2022,” ABS head of construction statistics Daniel Rossi said.



“Private sector house approvals were also up 1.1%.” Data shows the growth was driven by the approval of many apartment buildings in NSW.

Picture: GettyHousing Industry Association economist Maurice Tapang said the increase in approvals signal “positive momentum” for new homes. “New housing approvals had been strengthening on the back of low levels of unemployment, recovering real wages and ongoing strong population growth, even before the first interest rate cut was delivered,” Mr Tapang said. “The rise in home building activity will be more evident in states and regions with lower land costs and lower taxes on new homes, while those with higher tax imposts will remain weak.

” According to the data, a large number of apartment buildings approved in NSW drove a majority of the growth. Property Council Group executive policy and advocacy Matthew Kandelaars said while this was positive news, more needs to be done as the figures still fall short of their historic high. “We are approving thousands of fewer apartments now than a decade ago.

Regulations, opportunistic taxes and low productivity are hurting our ability to build the homes Australians need,” Mr Kandelaars said. “Apartments take nearly three years from approval to completion and face many hurdles from high construction costs, labour shortages and tax policies that deter investment and put project feasibility under pressure.” In January 2025, approvals for residential dwellings rose by 6.

3% totalling 16,580 units. Picture: GettyUrban Development Institute Australia NSW CEO Stuart Ayres echoed similar sentiments, noting that “it’s too early to say” if the state has turned the corner in the apartment market. Approvals for detached houses rose by 6.

1% compared to the previous year, with Western Australia, South Australia and Queensland leading the charge with 29.2%, 27.5% and 13.

9% respectively. Whereas NSW and Victoria saw declines by 9.5% and 0.

9%. “We need more of all types of homes, going up in one type and backwards in another is not what NSW needs,” Mr Ayres said. Master Builders Australia chief economist Shane Garrett said while private dwellings, excluding houses, numbers were positive, more work is needed to meet National Housing Accord targets.

“Under the National Housing Accord, an average of 240,000 new homes are required per year. We are still far short of this,” Mr Garrett said. “A shortfall of over 325,000 homes will eventuate over the Accord’s term if approvals remain at their pace of the past 12 months.

” All eyes on the federal electionIn the lead up to the federal election set to take place sometime before May 17, Master Builders Australia launched its federal election platform, which outlines specific policies to address the housing crisis.These include focusing on critical infrastructure, improving skills among workers and investing in future building technologies and sustainability The building and construction association has targeted 40 seats across the country with a high share of building and construction businesses. It also plans to release a weekly scorecard on how major parties are performing against their housing solutions checklist.

“Policies must be supply focused by bringing down construction costs, boosting productivity and ensuring land is shovel ready,” Master Builders Australia CEO Denita Wawn said. “Housing is not a political football to be passed around from local, state and federal governments. It requires a coordinated approach with the federal government leading the way.

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