Building approvals have jumped 20,000 in a year – but are so far short of targets to fix the housing crisis, affordability is tipped to get worse this year.
Australian housing affordability is set to get worse across 2026 as the nation’s new home approvals continue to fall almost 50,000 short of government targets.
Experts now believe it could be into the next decade before homebuyers begin to see the benefits of nationwide planning and building industry reforms intended to boost the supply of new homes and improve affordability.
Australian Bureau of Statistics building approvals data released today show that by the end of November Australia had green lit 193,299 new homes in the past 12 months.
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That’s up more than 20,000 from the same period a year prior, and has hit a more than three-year high as the best figure since mid 2022.
Much of the gains came from rises in apartment and unit approvals, with data showing substantial increases in every state — and Queensland recording its highest number of new approvals in a month for that part of the property market since 2016.
New housing approvals are at their highest level in more than three years.
However, Housing Industry Association senior economist Tom Devitt said part of the reason for the increase in new units being approved was that the values of established homes in that sector had risen enough to make them viable.
Mr Devitt said there was a growing question mark over whether the target of 240,000 new builds a year, or 1.2 million homes by July 2029, as part of the National Housing Accord bid to improve housing affordability was actually enough to improve affordability.
The Accord is a key part of the Albanese government’s efforts to address a housing crisis being felt in almost every corner of the country.
And with Australian approvals, which do not all necessarily proceed to being built, still almost 50,000 short of their annual target he said renters and those buying established homes should expect affordability to worsen in 2026.
HIA senior economist Tom Devitt has warned Aussie housing affordability will get worse in 2026 for buyers and renters.
“The increase in established apartment values is making approvals more viable … which is definitely what we want to see, and what policy makers want to see,” he said.
“But it’s still not going to get to the kind of numbers required for the Accord target. So at least for this year, housing affordability will continue to get worse.
“The next housing upswing is taking shape, but it will not reach its full potential unless policy settings support it.”
The ABS data also showed the nation’s average house approval is at a record $519,906.
Oxford Economics … Tim Hibberd said that was up 6.5 per cent on a year ago, with even bigger jumps in South Australia, up 16.4 per cent, and Victoria, up 7.9 per cent.
Experts believe more than a million new homes are needed to fix Australia’s housing crisis.
Mr Hibberd said housing was a “chunky” contributing factor to Consumer Price Index movement, and while he did not suggest the increase in prices would lead to rate hikes, he said there did not appear to be any major sign of relief ahead.
Mr Devitt said an interest-rate increase is now “definitely more likely than it was six months ago”, however noted that HIA was not expecting any in the first half of 2026.
Oxford Economics is anticipating that the nation might begin to reach 240,000 new approvals by mid 2028, but even then are not anticipating any improvements to housing affordability until the end of the decade and probably after 2030.
“It’s just going to be a long journey,” Mr Hibberd said.
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