Building approvals hit two-year high as apartment construction surges

Australian dwelling approvals reached their highest level in 22 months with nearly 15,000 new homes approved for construction in October.

New data from the Australian Bureau of Statistics showed total dwelling approvals rose 4.2 per cent for the month.

Approvals for apartments and townhouses jumped 24.8 per cent to 5,859 units, the highest since May 2023.

Private house approvals fell 5.2 per cent after hitting a two-year peak in September.

NSW led the increase with a 34.8 per cent rise in total approvals, followed by Victoria at 8.9 per cent and Tasmania at 3.9 per cent.

Queensland, Western Australia and South Australia recorded declines of 14.1 per cent, 11.9 per cent and 0.3 per cent respectively.

Property Council’s group executive Matthew Kandelaars said the apartment approval increase was encouraging but needed consistency.

“Apartment approvals are historically volatile, so we need more consistency to identify a trend, but the increase is positive,” he said.

The data showed 169,400 new dwellings were approved over the past 12 months, with high-rise apartment approvals reaching 2,782 in October.

Master Builders Australia’s chief economist Shane Garrett said housing undersupply was driving up rents.

“The year to October 2024 saw rents increase by another 6.7 per cent on already onerous levels,” he said.

Property industry groups welcomed recent Help to Buy and Build to Rent legislation but called for broader government action.

Master Builders Australia CEO Denita Wawn urged cross-government collaboration.

“To get the policy settings right and create an environment where the building and construction industry can get the job done, we need governments at all levels, across a range of portfolios, working together,” she said.

At the current approval rate, Australia would fall 353,000 homes short of the National Housing Accord’s 1.2 million target by 2029.