October home building approval highest in 2 years

Approvals for private dwellings excluding houses (which includes townhouses and apartments) increased by 24.8 per cent to 5,859, reaching the highest level since May 2023.

House approvals dropped by 5.2 per cent after reaching a two-year high in September 2024.

Across the country, approved total dwellings varied, with NSW and Victoria boosting the results with 34.8 per cent and 8.9 per cent, respectively.

Additionally, only Tasmania stayed “in the black” with a 3.9 per cent increase in total dwellings approved, while Queensland, Western Australia and South Australia fell to -14.1 per cent, -11.9 per cent and -0.3 per cent, respectively.

In October, approvals for private sector houses fell across most states: Queensland decreased by 12.3 per cent, Western Australia by 6.1 per cent, Victoria by 4.5 per cent, and NSW by 1 per cent. South Australia was the only state to rise in October, with an increase of 1 per cent.

In October, 2,782 high-rise apartments were approved, an increase from 1,815 in September, marking the highest approval rate since January.

In comparison, only 56,797 apartments and townhouses were approved despite the monthly rise over the past 12 months, which is lower than the 63,307 approved in the previous 12 months.

Property Council’s group executive, policy and advocacy, Matthew Kandelaars, said while he is pleased to see apartment approvals going up, more needs to be done to recover and reach once again the nearly 100,000 approvals recorded during the same period in 2017–18.

“Apartment approvals are historically volatile, so we need more consistency to identify a trend, but the increase is positive,” Kandelaars said.

“Apartments are an integral part of our housing ecosystem and can positively tip the supply equation at scale, and we need to get back to the construction levels seen nearly 10 years ago.

“We are now six months into the National Housing Accord’s ambitious target of delivering 1.2 million new homes and we cannot allow the target to slowly fade into the background over the next four-and-a-half years,” Kandelaars said.

Over the past 12 months, a total of 169,400 new dwellings have been approved. If the rate stays linear, only 847,000 new homes would be built over the next five years, falling 353,000 short of the National Housing Accord target.

Echoing the sentiment, Master Builders Australia’s chief economist, Shane Garrett, said despite new home buildings having momentum, more needs to be done to reach 1.2 million new homes by 2029.

“Failing to deliver the much-needed homes is having a real cost on Australians. The year to October 2024 saw rents increase by another 6.7 per cent on already onerous levels.

“This is a direct result of years of underbuilding of new apartments and units.”

Both groups have welcomed the latest Help to Buy and Build to Rent legislation that were voted in Parliament last week – yet they said only a collaborative effort would make the legislation fruitful.

“To get the policy settings right and create an environment where the building and construction industry can get the job done, we need governments at all levels, across a range of portfolios, working together in a ‘whole-of-government’ approach to housing,” Denita Wawn, Master Builders Australia’s CEO, said.

Similarly, Kandelaars said the federal government will have to tackle side issues, such as construction material prices and the labour workforce, to ensure the promised housing supply will advance.

“Sadly, the undersupply of housing has been allowed to fester for decades and will require action to address rising construction prices and labour shortage, alongside planning delays, slow approval processes and shifting state property taxes,” he said.