Dwelling approvals surge by 20% over the March quarter
Dwelling approvals across the country increased by 20.8 per cent in the first quarter of 2025, boosting supply but still falling short of the national housing target.
New seasonally adjusted data by the Australian Bureau of Statistics showed that 48,620 new dwellings were approved over the first quarter of 2025, representing a 20.8 per cent increase from the previous year.
Annually, dwelling approvals recorded a 13.1 per cent increase nationwide.
According to the data, the Northern Territory recorded the bulk of home building approvals over the March quarter with an 81.5 per cent increase.
South Australia took the second spot, recording a 49.4 per cent increase in approvals, followed by the ACT with a 43.8 per cent increase.
Western Australia, NSW and Victoria recorded a 27.3 per cent, 25.8 per cent and 22.1 per cent increase in home building approvals in the March quarter.
Queensland, however, recorded the smallest increase at 0.8 per cent, while Tasmania was the only state to experience a drop in approvals, down by 12.9 per cent.
Housing Industry Association senior economist Tom Devitt said the rise in numbers mostly came from multi-unit building approvals, which were up by 52.6 per cent.
In comparison, Devitt said detached approvals only recorded a slight 4.2 per cent growth.
“It is also important to remember that many recent apartment approvals are likely to be ‘faux’ approvals,” Devitt said.
“There are a very large number of apartments approved for construction across capital cities, but only a small number of these will commence construction.”
“A change in market conditions have meant that a number of apartment projects that were already approved for construction will need to seek re-approval and comply with the new construction code. The higher cost of construction will further impair sales volumes.”
While dwelling approvals grew over the first quarter of 2025, data showed an 8.8 per cent drop in March, for both private houses and units.
Seasonally adjusted numbers showed that house approvals in March dropped by 4.5 per cent to 8,804, following a 1.1 per cent increase in the previous month.
In comparison, house approvals in March 2025 were 3.3 per cent lower than last year.
Similarly, unit approvals fell by 27.4 per cent to 3,055 over the same period, but a 79.3 per cent increase compared to March last year.
According to the data, the overall decline in March was due to a drop in approvals in Victoria and Queensland.
Victoria recorded only 671 apartment approvals in March, down from 2,294 in February, while private house approvals fell by 10 per cent.
Similarly, Queensland recorded an 8 per cent drop in its private house approval sector over March.
Property Council group executive, policy and advocacy, Matthew Kandelaars, said while apartment approval figures can fluctuate, consistent growth is needed to meet Australia’s housing targets.
“March saw a fall in approvals across all housing types, with a particularly stark fall in apartment approvals reflecting the challenges faced to hit our national housing target,” Kandelaars said.
“Apartment approval data is volatile, but their long project timelines need stable tax and planning policies. Certainty is critical when these projects take years to build.”
“Even once a project is approved, labour shortages, state-based development-killing taxes and elevated construction costs are all putting pressure on new housing starts. We need an ‘all-in’ approach to turn these figures around,” Kandelaars said.
While approvals have increased over the March quarter to 48,620, industry experts said the number is far from the 20,000 homes needed to be built monthly to reach the national housing target of 1.2 million new homes by 2029.
Devitt said that Australia is only recording 180,000 building approvals yearly, short from the 240,000 annual builds needed.
“As it stands, the government is set to fall almost 20 per cent short of its own target and a few interest rate cuts from the RBA won’t be sufficient to increase the supply of homes to meet the 1.2 million target,” Devitt concluded.