Australian Bureau of Statistics data shows approvals increased 6.3% in January, with higher-density housing leading the way, rising 12.8%. Detached house approvals saw a modest 1.6% increase.
Despite this growth, approvals remain well below what is needed.
“Around 174,500 new homes received approval over the year to January 2025, up 5.8% over the previous year. However, it is still too low,” said Master Builders Australia Chief Economist Shane Garrett.
The National Housing Accord requires 240,000 new homes per year, meaning Australia is on track for a shortfall of over 325,000 homes if approval rates don’t improve.
Mr Garrett emphasised that higher-density housing must continue to grow: “Higher-density home building has been at woeful levels for nearly a decade, with insufficient new supply in this part of the market forcing rental prices sky high.
“Latest figures show that rental costs continue to be one of the worst sources of inflationary pressure across the economy. Over the year to January, average rents surged by 5.8%.”
Master Builders Australia CEO Denita Wawn also stressed the need for investment in housing supply and reducing barriers to construction.
“To ensure these gains are not short-lived, we need to see more investment in housing supply and action on reducing supply barriers,” she said.
