Home Approvals Surge but Housing Targets Remain a Challenge

The latest Australian Bureau of Statistics (ABS) figures show a sharp rise in building approvals, with June 2025 marking the highest monthly total since August 2022.

Seasonally adjusted data revealed 17,076 new dwellings were approved in June, up 11.9% from May. The lift was largely driven by private sector dwellings other than standalone houses, such as semi-detached homes, terraces, townhouses, and apartments, which surged 33.1% to 7,594 approvals. This was the strongest monthly result for this category since December 2022.

Apartments alone recorded a 12.2% rise in June, following a 30.9% increase in May. Across the states, results were mixed for total approvals: New South Wales led the gains with a 31.5% rise, followed by Queensland at 7.3% and South Australia at 2.5%. Western Australia and Victoria recorded declines of 6.4% and 6.1% respectively.

House approvals fell 2% to 9,142 nationwide, with declines across most states. Queensland recorded the sharpest fall at 6.3%, while Victoria was the only state to see an increase, up 1.4%.

In the 12 months to June, 185,844 dwellings were approved nationally, 13.5% higher than the previous year. ABS head of construction statistics Daniel Rossi noted the strong result in higher-density housing approvals as a key driver of the increase.

Housing Industry Association senior economist Tom Devitt pointed to strong population growth, resilient labour markets, and recovering household incomes as factors supporting the rebound. He added that recent Reserve Bank interest rate cuts in February and May, along with expectations of further easing, would likely encourage more homebuyers, particularly in markets where affordability has been a challenge.

However, Mr Devitt warned that Australia still faces a significant gap in meeting the National Housing Accord target of 1.2 million new homes by 2029. To stay on track, the country needs to approve at least 240,000 homes each year, yet current projections suggest an average of just 200,000 housing starts annually over the next four years.

The Property Council of Australia echoed the positive sentiment about the rebound in apartment approvals, which rose 42.1% over the 2024–25 financial year to 42,387. Group executive policy and advocacy Matthew Kandelaars said the growth was encouraging but stressed that approvals alone would not solve the housing shortfall.

He highlighted the need to improve productivity and reduce planning bottlenecks, noting that too many projects face delays due to regulation. “We need to unlock more homes by removing planning and environmental red tape to push assessments through the system sooner and with greater certainty,” Mr Kandelaars said.

While the June figures reflect renewed momentum in housing supply, industry leaders agree that consistent, large-scale delivery will be essential if Australia is to bridge the gap between approvals and actual completions — and ultimately meet its ambitious housing targets.