The national figures for monthly dwelling approvals show little movement, but one state is ringing alarm bells.
According to the Australian Bureau of Statistics, the total number of dwellings approved fell 0.3% over the course of February, to sit at 16,606 for the month.
Detached house approvals rose, but were cancelled out by a drop in numbers for apartment and multi-dwelling builds – private sector houses saw a 1% uplift, to 9203, while private sector dwellings excluding houses fell 1.5%, to 7113.
On a national level, the marginal drop for the month shouldn’t be cause for concern. While an ideal scenario would show approvals lifting month-on-month, the stagnation in February comes after a 6.3% increase in January.
But when it comes to state-by-state performance, industry advocates have flagged a point of concern.
While February’s data indicated good news for housing approvals in many states – including Tasmania, up 61.3%; Victoria, up 36.4%; Western Australia, up 17.1% and Queensland, up 13.0% – NSW experienced a sharp drop.
NSW was the state that drove much of January’s growth due to a large number of apartment developments getting the go-ahead, but the latest news confirmed warnings that had been issued by industry leaders in previous months.
NSW saw its approvals drop 44.1% over the course of February, resulting in just 3,390 new dwellings receiving a green light, compared to 6062 in January and 4277 in December 2024.
Detached housing approvals rose over the month of February, while apartment approvals fell back. Image: Getty
“We cautioned in March that two months of stronger approvals didn’t make a trend, and unfortunately today’s numbers confirm that concern,” said Katie Stevenson, executive director of the Property Council in NSW.
Last month, the Urban Development Institute’s NSW CEO, Stuart Ayres, had similarly noted it was “too early to say” if the state had turned the corner in the apartment market.
Ms Stevenson commented that the latest figures put the state far behind its obligations as far as the National Housing Accord target, which aims to see 1.2 million new homes constructed across the country over a five-year period.
“It’s a serious warning sign. We need to be approving more than 6250 homes every month to be on track to meet our Housing Accord target – in February, NSW managed just over half that, and every month we fail makes the task ahead even tougher,” she said.
With state budget due in June, the Property Council is urging the government to devote funding to permanent fast-tracked planning pathways for large-scale residential developments as well as more money for resources to manage a growing volume of development assessment applications.
Apartment construction is an integral part of Australia's plan to build 1.2 million new homes. Image: Getty
National fixes also in focus
On a national front, the Housing Industry Association issued a similar call, urging more funding to be devoted to “structural reforms” to support development, particularly as buyer demand is expected to rise over the year with interest rates forecast to come down.
“Medium-to-high density housing activity, in particular, has been around just half its required volumes over the last year, constrained by labour shortages, finance costs and punitive government taxes and regulations,” said Tom Devitt, HIA’s senior economist.
Moreover, Master Builders Australia CEO Denita Wawn urged governments to increase investment in “housing supply and action on reducing supply barriers”.
"We have long called for better co-ordination across departments when it comes to investment in building and construction projects,” she said.
Ms Wawn added that Master Builders welcomed the Coalition’s latest election commitment to introduce a new statutory body called Investment Australia, targeted at streamlining sluggish approval processes, with a specific working group focused on construction.
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