Australia’s home building sector saw a notable rebound in the March quarter, with the total number of dwelling units commenced rising 11.7% to 47,645 dwellings, seasonally adjusted, according to the latest ABS Building Activity data.
This rise was driven by a 21.8% jump in private sector other residential commencements, reaching 18,161 dwellings, while private new house commencements rose 6.3% to 27,923 – both reversing previous quarter declines.
This rebound was led by a sharp lift in higher density home building. Higher density starts rose by 20.9% over the quarter and were 29.1% higher than a year ago.
“The 19,142 starts is the highest quarterly figure for this segment since December 2021. Detached housing also saw growth, albeit modestly,” Master Builders Australia CEO Denita Wawn said.
However, Wawn cautioned that the uplift still falls short of National Housing Accord goals.
“Despite this uplift, we are still tracking behind what’s required to meet the National Housing Accord targets,” she said in a media release.
“Since the commencement of the Housing Accord, just 134,466 new dwellings have commenced. To stay on track, we would need around 60,000 starts per quarter – we are about 25% short of that pace.”
The number of dwellings completed in the March quarter fell 4% from the previous quarter to 43,517 dwellings, of which 27,663 were new private houses (down 1.3%) and 15,190 were other private dwellings (down 9.3%). This is far below the required quarterly pace to meet housing targets.
Matthew Kandelaars, Property Council group executive for policy and advocacy, said the figures show Australia is still well behind where it needs to be.
“Official data on completions for the March 2025 quarter, nine months into the National Housing Accord, show we’re running 18,147 homes behind target,” Kandelaars said in a media release.
“It takes more than a year to build a home and more than three years to build an apartment project. Yet another quarter of poor numbers means more disappointment for future home buyers and renters.
“Progress against our housing targets was never going to be linear, but we’ve reached the point where we need to hit housing delivery in top-gear just to keep pace, let alone get ahead.”
In seasonally adjusted terms, the value of total building work done rose 0.5% to $38.9 billion in the March quarter. This was supported by:
Wawn noted that renovation activity remained stable.
“Home renovations remained stable, rising 1.1% for the quarter and 5.5% compared to a year ago – broadly in line with recent trends,” she said.
Work on non-residential buildings dipped slightly, falling 0.6 per cent in the quarter and 4.1% over the year. This is a marginally smaller fall than in the previous quarter (-2.9%).
Both Master Builders Australia and the Property Council stressed the need for government action to address persistent structural barriers to housing delivery.
“While there is room for optimism that the worst is now behind us, the government and industry need to play catch-up if we’re going to meet the 1.2 million new homes target under the National Housing Accord,” Wawn said.
She pointed to long-standing productivity issues: “Productivity in the building and construction industry has fallen 18% over the last decade, even as housing costs have surged by over 40%.
“Boosting productivity is essential to building a better, safer and fairer industry. It helps deliver quality outcomes, improves safety standards and keeps costs down.
“The building and construction industry is crucial to driving economic growth, making up over 11% of Australia’s GDP.”
Kandelaars echoed the call for urgent reform.
“We’re building homes half as fast as we were 30 years ago. That’s not just a housing issue but a productivity problem,” he said.
“Next month’s Economic Reform Roundtable hosted by the treasurer is a chance to put housing delivery at the heart of the national productivity agenda – which means getting investment settings right and focussing on better, smarter and more efficient planning and environmental approvals.
“We can’t lift productivity if we’re not building the homes our workforce needs. Housing isn’t just a social priority – it’s economic infrastructure.
The private sector is ready to build but we need all governments to clear the path and support a system that actually delivers homes.”
