An increase in dwelling approvals signals progress but also underscores a gap in reaching the National Housing Accord target.
According to seasonally adjusted data from the Australian Bureau of Statistics (ABS), in May 2025 the total number of dwellings approved rose by 3.2% to 15,212.
ABS head of construction statistics Daniel Rossi said the overall increase was driven by private sector dwellings excluding houses. This category includes apartments, townhouses, semi-detached homes, and row or terrace houses, and it saw an 11.3% increase compared to April’s numbers.
Building approvals rose 3.2% to 15,212 in comparison to April's numbers. Picture: Getty
Apartment approvals alone saw a 40.1% increase, driving the rise in the series. New South Wales experienced the largest increase in apartment approvals, with 2274 apartments approved in May compared to 672 in April.
Houses had a smaller national increase of 0.5%, reaching 9454 dwellings. Nonetheless, the uptick brought house approvals to their highest level since October 2024.
“Victoria had a strong month for private sector house approvals, with the state up 9.5 per cent,” Mr Rossi said.
“The rise in Victoria was mostly offset by a 7.6 per cent drop in Western Australia and a 5.4 per cent fall in New South Wales.”
One year on
The numbers come one year after the federal government launched its Housing Accord goal of building 1.2 million new homes over five years. To achieve this, the country needs to build 240,000 new homes each year.
According to industry analysis, 168,050 homes began construction across the country in 2024.
The Property Council of Australia welcomed May’s building approvals but noted the national pipeline remains below what is needed to meet the National Housing Accord target.
“This uptick is welcome but we’re a long way from mission accomplished. The number of new homes being approved is trending in the right direction but still below where it needs to be,” Property Council group executive policy and advocacy Matthew Kandelaars said.
“What is clear at the one-year anniversary of the national housing target is that, without them, we’d be in a far worse position.
“To hit the Accord’s 1.2 million homes target by mid-2029, we need to be approving at least 20,000 new homes every month and we’re still falling short of that mark.”
House approvals saw their highest level since October 2024. Picture: Getty
Master Builders Australia stated that, over the year to May 2025, 182,894 new homes were approved across the country – the highest total for any 12-month period since early 2023.
Analysis by chief economist Shane Garrett showed that if this pace continues, only 915,000 new homes would be delivered in five years, leading to a shortfall of 285,000 homes from the target.
The industry body is advocating for policies to address productivity challenges impacting the sector.
“Boosting productivity is essential to building a better, safer and fairer industry. It helps deliver quality outcomes, improves safety standards and keeps costs down,” Master Builders Australia CEO Denita Wawn said.
“It’s not governments that build homes, it’s private businesses. What we need is for them to clear the path so we can get on with the job.”
Mr Kandelaars said more work needs to be done to reduce red tape, which leads to delays and cost pressures.
“We’re still seeing too many viable projects stalled by red tape, slow planning and environmental approvals, and high development costs,” he said.
“Housing markets across the country need more certainty. That means better investment settings, faster utility connections, and a ramp-up in skilled workers from home and abroad.”
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