Detached house approvals soar to 41-month high as housing demand remains robust
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Photo by Curtis Adams
In a significant development for the Australian housing market, detached house approvals have reached their highest level in over three years. According to the latest data released by the Australian Bureau of Statistics, January 2026 saw a total of 9,900 detached houses approved for construction across the nation. This marks the strongest monthly result for detached house approvals since September 2022, highlighting a resurgence in the housing sector.
HIA Chief Economist Tim Reardon commented on the positive trend, stating, “There were 9,900 detached houses approved for construction nationally in the month of January 2026.” He further emphasised, “This is the strongest monthly result for detached house approvals since September 2022.”
The increase in approvals was largely driven by robust performances in New South Wales, Queensland, and Western Australia. Reardon noted, “The pickup in detached house approvals in January was driven by increases in New South Wales, Queensland, and Western Australia.” This growth comes amidst a backdrop of low unemployment rates and strong population growth, factors that continue to fuel housing demand across the country.
One of the key drivers behind the surge in detached house approvals is the rising cost of established homes. “Established home prices continue to grow quickly compared to prices of other goods and services in the economy. This has helped some households opt to build a new home as an alternative,” explained Reardon. This trend indicates that many Australians are finding building new homes a more viable option compared to purchasing existing properties.
In addition to new home constructions, the renovation sector has also seen significant activity. Over the 12 months leading up to January 2026, council-approved renovation work increased by 5.4 per cent, reaching a total of $1.265 billion. Reardon highlighted the strength of this market segment, stating, “Renovations have also been a strong segment of the market, responding to this high demand.”
While detached house approvals have shown a strong upward trend, the multi-unit sector has experienced volatility. In January 2026, multi-unit approvals, which include semi-detached dwellings and apartments, decreased by 21.0 per cent to 4,670. This decline was observed across all jurisdictions except for Western Australia. However, Reardon pointed out that the long-term trend remains positive, with multi-unit approvals increasing by 21.0 per cent over the past 12 months to 79,130.
“The poor result in January 2026 does not significantly diminish the upwards trend in multi-unit approvals over the past 12 months,” Reardon stated, acknowledging the fluctuations in monthly data but emphasising the overall growth in this sector.
In terms of regional performance, Western Australia led the way with the largest increase in detached house approvals, rising by 12.8 per cent compared to December. Queensland and New South Wales followed, with increases of 2.9 per cent and 1.2 per cent, respectively. However, not all states shared in this growth. South Australia and Victoria experienced monthly declines of 6.9 per cent and 4.6 per cent, respectively. The Australian Capital Territory, Northern Territory, and Tasmania saw significant drops in original terms, with approvals falling by 55.6 per cent, 53.3 per cent, and 25.0 per cent, respectively.
Reardon concluded by addressing the need for governmental support to sustain this growth in housing supply. “In order to increase the supply of homes in Australia, governments need to help lower the cost of delivering new land to market,” he said, underscoring the importance of policy measures in facilitating continued expansion in the housing sector.
Overall, the upward trajectory in new dwelling approvals across Australia is notable, with a 9.2 per cent increase over the past 12 months to 193,480. This data paints a promising picture for the Australian housing market, as it continues to navigate the challenges and opportunities presented by a dynamic economic landscape.