Australia’s home building approvals jumped sharply in September, driven by a surge in apartment projects and a rebound in detached houses.
According to Australian Bureau of Statistics (ABS) data, the total number of dwellings approved rose 12% to 17,019 in seasonally adjusted terms – the strongest monthly result since June.
“The rise in total dwellings was driven by a 26% rise in private dwellings excluding houses. This is following consecutive falls in July and August,” said Daniel Rossi, ABS head of construction statistics.
“Private sector houses also rose, up 4%, to 9,547 dwellings. This comes off the back of a 1% fall in August.”
Private sector house approvals rose across most of the country, led by New South Wales (+7.8%) and Victoria (+7.3%). Queensland was the only state to fall, down 6.9%.
“Despite the rise in September, house approvals are around the same level as they were this time last year,” Rossi said.
Apartments were the standout driver of the monthly increase. Private sector dwellings excluding houses rose 26% (to 7,219) in September and are now 55.2% higher than a year ago.
In original terms, apartments approved jumped 81.7% to 5,430, following a weak August result of 2,989.
“This month had the highest number of apartments approved since December 2022,” Rossi said.
Townhouse approvals also rose 5.7% to 2,616 in September.
While the total value of building approvals fell 4.8% to $16.51 billion in September, the residential segment reached a new record.
Total residential building value rose 7.4% to $10.11 billion, comprising an 8.2% increase in new dwellings ($8.93bn) and a 1.2% lift in alterations and additions ($1.18bn).
Non-residential approvals dropped 19.3% to $6.39bn, but remain nearly 11% higher than a year ago.
Master Builders Australia chief economist Shane Garrett (pictured left) said the bounce was welcome after a sluggish winter period.
“Detached house approvals increased by 4.4%, the best monthly result in a year, while higher-density approvals surged 23.7%, their strongest since June,” Garrett said.
“Over the year to September, 191,695 new homes were approved across Australia – the highest annual total in almost three years and 13.7% higher than the previous 12 months.”
However, he cautioned that “this still leaves us around 48,000 homes short each year of what’s required under the National Housing Accord. That shortfall must be closed urgently if we’re to reach the government’s target.”
Master Builders CEO Denita Wawn added: “This is welcome news for builders and tradies on the ground, but we can’t ignore the broader context.
"Last week’s inflation and producer price data showed building costs and rents are still rising. The ongoing imbalance between housing supply and demand is keeping pressure on affordability for renters and home buyers alike.”
The Property Council of Australia welcomed the lift but warned momentum can’t be taken for granted.
“We’re very pleased to see a strong rise in approvals, but one strong month alone is not enough to meet our welcome and ambitious housing targets,” Matthew Kandelaars (pictured right), group executive for policy and advocacy, said in a media release.
“We need to build over 20,000 homes each month to meet our housing targets,” Kandelaars said, “meaning approval figures need to consistently exceed this benchmark.”
He said long approval timelines for large-scale apartment projects were “putting a handbrake on supply.” He welcomed recent planning reforms in NSW and Victoria, saying “implementation must match ambition” to move projects from approval to completion.
“Better regulatory settings will be critical to support Australia’s $4.3 trillion superannuation sector to deliver 35,000 additional new homes over five years,” he said.
Outlook: Solid recovery but long road to housing targets
Industry leaders agree that September’s rise offers some relief for the construction sector, but the underlying supply challenge remains severe.
As Wawn concluded: “Boosting housing supply remains the only lasting solution. Governments must fast-track reforms that cut red tape, improve planning and approvals, lift productivity, boost the construction workforce, and get the economy moving again.”
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