Approvals still trail housing targets, industry body warns
Australia’s residential building pipeline strengthened in February, with the number of dwellings approved rising 29.7% from the prior month to 19,022, new figures from the Australian Bureau of Statistics (ABS) have shown.
The lift was largely attributed to a surge in approvals for private dwellings other than houses, according to Daniel Rossi, ABS head of construction statistics. “This follows a 25% fall in private dwellings excluding houses in January and a 29.7% in December,” he added.
“There have been a total of 195,434 dwellings approved, in original terms, over the past 12 months. This is a 9% increase on the 12 months prior to that.”
Approvals for private sector houses edged up 0.2% in February to 9,847 dwellings, leaving the level 6.1% higher than a year earlier.
“New South Wales recorded the largest rise in private sector house approvals, up 13.7% to the highest level since December 2023,” Rossi said. “In contrast, Queensland had the largest fall in February, down 13.4%.”
Approvals for private sector dwellings excluding houses more than doubled to 8,922 dwellings in February.
In original terms, apartment approvals rose 191.2% to 5,398 dwellings, 29.8% higher than a year earlier. Townhouse approvals also rose, up 73.8% to 2,981 dwellings, following a 38.7% drop in January.
Meanwhile, the value of total building approvals increased 14.4% in February to $20.43 billion, after a 7.8% rise in January.
Residential approvals accounted for most of the lift, rising 30.8% to $12.50 billion, a record level. That outcome reflected a 35.9% increase in new residential building to $11.21 billion, partly offset by a 1.2% fall in alterations and additions to $1.29 billion.
Non-residential building approvals fell 4.4% to $7.93 billion, after a 19.5% increase in January.
Despite the strong gains in February, Master Builders chief economist Shane Garrett (pictured right) said the monthly increase did not change the broader shortfall against national supply ambitions.
“Over the last year, 196,491 new homes received approval, which is 58,509 homes below the yearly National Housing Accord target, underscoring the need for major policy reform,” Garrett said. “Global events over the past month are making it even more difficult.”
“We’re concerned that February’s strong uptick will evaporate due to the rapid cost escalation and potential supply restrictions caused by the Middle East conflict,” added Master Builders chief executive Denita Wawn. “The events of recent weeks reinforces the need to get the federal budget right.”
A bank economist said near-term conditions could still be uneven, with interest-rate expectations and affordability constraints likely to limit momentum.
“Looking ahead, further expected RBA cash rate increases across May, June and August, alongside softer dwelling price growth, are likely to temper the near-term recovery in dwelling approvals,” said Luka Belobrajdic, economist at Westpac.
“While detached housing momentum has improved, volatility in unit approvals and broader affordability constraints suggest the recovery is likely to remain uneven.”
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