Everyday Australians trying to build a home are being hit with holding costs of up to $80,000 before construction even starts.
Everyday Australians trying to build a home are being hit with holding costs of up to $80,000 before construction even starts, as council delays and red tape leave projects stuck in limbo.
The warning comes despite fresh Australian Bureau of Statistics data showing detached house approvals have climbed to their strongest monthly result since September 2021.
But builders and property experts say the figures hide a worsening problem for families across the country: an approval on paper does not mean a home is about to be built.
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Pryor Connections director Mitch Pryor said families were bleeding money while they waited for projects to move from paperwork to construction.
“From what I am seeing on the ground, we are absolutely still falling behind,” Mr Pryor said.
“The biggest issue is not just a trade shortage or building costs. The real handbrake is red tape.
“A project being approved does not mean a home is being built.
“There is a big difference between a number on a government spreadsheet and someone actually pouring concrete.”
Pryor Connections director Mitch Pryor says red tape and council delays are leaving some home projects stuck before a shovel hits the dirt.
Mr Pryor said the delays were part of a broader problem facing builders and families, with approvals often taking months to become actual building work.
He said an Ascot Vale project that required building consent, rather than a full building permit, had been sitting for close to 18 months without work starting.
A Rye project on a vacant block had taken close to 12 months to reach the point where construction could begin.
“The holding costs are brutal,” Mr Pryor said.
“By the time you sit through months of council delays, you could easily spend $70,000 or $80,000 just holding the property before a shovel goes in the ground.
“That is not viable for most people.”
ABS building approvals data shows Australia’s housing pipeline has improved on paper, but experts warn approvals do not always become completed homes.
Council delays, compliance costs and rising holding charges are adding pressure to families trying to build new homes.
The ABS figures show 17,019 dwellings were approved nationally in May, 5.3 per cent higher than a year earlier.
Private sector house approvals rose 2.8 per cent to 10,537 for the month, while total house approvals reached 10,690.
Annualised, the May result would amount to about 204,000 homes — well short of the 240,000 homes a year needed under the National Housing Accord.
Victoria approved 4808 dwellings in May, the highest of any state, showing one of the nation’s biggest housing pipelines would still not be enough to close the national shortfall.
The state also led the nation for private sector house approvals, with 2948 new detached homes approved, ahead of NSW on 2284 and Queensland on 2266.
Master Advocates director Mark Errichiello says a planning approval is one thing, but a completed home buyers want to purchase is another. Picture: Ellen Smith
Experts warn taxes, holding costs, compliance requirements and infrastructure charges are being passed on to homebuyers.
Master Advocates director Mark Errichiello said approvals alone would not solve Australia’s housing shortage if the homes did not stack up for developers or buyers.
“It is not just about approvals,” Mr Errichiello said.
“The bigger question is: what is actually being approved, where is it being approved, and is it the kind of housing people genuinely want to live in, buy and take a financial risk on?
“A planning approval is one thing. A completed home that buyers want to purchase is another thing entirely.”
Mr Errichiello said red tape, construction costs, holding costs, taxes and compliance requirements were making housing more expensive before buyers entered the market.
“Ultimately, that money gets passed on to the consumer, whether they are an owner-occupier or an investor,” he said.
“In some projects, 45 to 50 per cent of the cost can be tied up in taxes, holding costs and other charges.”
Ray White AKG principal Avi Khan says governments are celebrating too early if approved homes are not funded, built and occupied.
Brisbane’s housing demand is being fuelled by interstate migration, population growth, infrastructure spending and the looming Olympics.
Ray White AKG principal Avi Khan said the approvals data showed improvement, but Australia remained well short of fixing its housing shortage.
“The approvals data paints a mixed picture,” Mr Khan said.
“Yes, the pipeline has improved, and that is a healthy sign. But it is nowhere near moving fast enough to fix the housing shortage Australia is experiencing.
“An approval is only the beginning of the process. It does not mean a home is ready, affordable or even guaranteed to be delivered.”
Mr Khan said Queensland’s approval lift was welcome, but still lagged demand from interstate buyers, migrants and locals.
“Queensland has strong underlying demand,” Mr Khan said.
“We have interstate migration, population growth, the Olympics on the horizon, and a major infrastructure boom already under way.
“But even with approvals improving, the shortage is still very real.”
HIA chief economist Tim Reardon says detached house approvals have hit their strongest monthly result since September 2021. Picture: Tertius Pickard
Housing Industry Association chief economist Tim Reardon said the detached house approval figures showed momentum was improving, but Australia was still not building enough homes.
“Building approvals for new houses increased to a new high in May 2026, up by 3.0 per cent to 10,690, the strongest month since September 2021, while multi-units decreased by 7.3 per cent in the month,” Mr Reardon said.
“There is a narrow window of opportunity to get into the housing market, as home prices have fallen due to the uncertainty created by the budget.
“At the same time, we are not building enough homes to meet growth in demand.”
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