Building approvals signal moderate housing recovery ahead

Australian building approvals showed signs of improvement in November 2024, despite a 3.6 per cent monthly decline in total dwelling approvals.

The latest Australian Bureau of Statistics data revealed total approvals rose 7.2 per cent over the three-month period.

The figures showed a 5.4 per cent increase compared to the same period in 2023.

“Building approvals data reveals the ongoing strengthening in the new home building market and continue to point to a moderate-pace recovery in 2025,” HIA Senior Economist Matt King said.

Detached house approvals increased by 0.7 per cent in the three months to November 2024 compared to the previous quarter, and grew 7.1 per cent year-on-year.

Multi-unit approvals rose 20.1 per cent in the quarter and were up 2.6 per cent compared to the same period in 2023.

Western Australia recorded the strongest growth in detached house approvals, rising 40.8 per cent compared to the previous year, followed by South Australia at 26.5 per cent and Queensland at 14.6 per cent.

The Australian Capital Territory saw the largest decline at 34.6 per cent, while New South Wales fell 7.5 per cent.

“November 2024 marked exactly one year since the RBA last raised interest rates. Unchanged interest rate settings have provided a welcomed degree of certainty for consumers,” King said.

Multi-unit approvals surged in Western Australia by 207.5 per cent compared to the previous year, while Tasmania recorded an 85.7 per cent decline.

King noted that despite some improvements, multi-unit approvals remained at decade-low levels due to challenges including material costs, labour shortages and credit constraints.

Perth, Adelaide and South-East Queensland led the recovery in new home contract sales and building approvals, while Sydney’s activity remained subdued across both housing segments.