Australia’s housing crunch worsens as building approvals plunge in December.
The total number of dwellings approved nationally fell 14.9% in December to 15,542, according to seasonally-adjusted data from the Australian Bureau of Statistics (ABS), reversing last month’s 15.2% gain.
The value of total residential buildings fell 16% to $9.49 billion, while the value of non-residential buildings was down 6.4% to $6.83 billion.
Daniel Rossi, head of construction statistics at the ABS, said the decline in new home approvals was driven by a sharp fall in approvals for private apartments, units, and other non-house dwellings — down 29.8% to 5,855 in December. This comes after a nearly 30% rise in apartments in November.
But ANZ Economist Madeline Dunk cautioned that these figures can swing sharply month to month, often driven by just one or two major development projects.
"It is a really jumpy series [of data]," Dunk told Australian Broker. "It is hard to draw too much signal from any one month. Let's say a big apartment block gets approved. That adds a significant amount of building approvals that month. And if an apartment block doesn't [get approved] and it gets delayed to the next month or whatever, it might have bigger flow and effects later. Because of the number of apartments in a huge block.
"At the end of the day, if you look at where approvals are relative to history, they're still pretty soft," she continued. "And particularly when you think about how many more people we have [in Australia] compared to let's say 10 years ago."
By state, South Australia had the largest increase in private sector homes, or standalone homes, up 13.1% in December to 895. At the bottom end was New South Wales, which fell 5.5% the same month to 1,859. Among total dwellings approved, which includes both standalone homes and apartments, Victoria saw the sharpest decline, down 32.2% to 3,514. Tasmania had the biggest increase, up 11.3% during the month, to 216 approvals.
Meanwhile, private sector house approvals were up 0.4% during the month to 9,487. That's on top of a 0.8% increase in November, or 5.7% higher than a year ago.
But it might not be fast enough to solve the national housing shortage.
In 2023, Prime Minister Anthony Albanese laid out an ambitious plan to build 1.2 million new homes across the nation by 2029 by way of the National Housing Accord.
But with fewer homes coming onto the market, property prices that keep rising and competition intensifying throughout the market, some critics argue that new housing isn't keeping pace with demand.
Furthermore, approval figures reflect the number of new buildings that have been approved to be built — not actual completions. Many approved projects may never reach completion.
Moving forward, Harry Ottley, an economist at Commonwealth Bank of Australia (CBA), said "in 2026, we anticipate building approvals will continue their upward trend, but at a slower rate of growth."
