Much needed housing approvals uplift

In some positive news for the building and construction industry, new home building approvals are at their highest level since December 2022, but we are still a long way off target.

Master Builders Australia Chief Economist Shane Garrett said new data from the Australian Bureau of Statistics released today show during January, there was a 6.3 per cent increase in new home building approvals.

“Higher density home building approvals did most of the heavy lifting, rising by 12.8 per cent during the month. Approvals for detached houses crept up slightly by 1.6 per cent higher during January.

“Around 174,500 new homes received approval over the year to January 2025, up 5.8 per cent over the previous year. However, it is still too low.

“Under the National Housing Accord, an average of 240,000 new homes are required per year. We are still far short of this.

“A shortfall of over 325,000 homes will eventuate over the Accord’s term if approvals remain at their pace of the past 12 months.

“During January, higher density approvals were at their highest in over two years. The growing momentum we have in higher density home building is encouraging and it is crucial this is sustained.

“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 per cent,” Mr Garrett concluded.

Attributable to Master Builders Australia CEO Denita Wawn:

“To ensure these gains are not short-lived, we need to see more investment in housing supply and action on reducing supply barriers.

“Independent research by Insightfully found 1 in 4 say housing is the most important issue for them and 7 in 10 Australians say the Federal Government has not done enough.

“Master Builders’ election platform lays out a clear guide on federal policies that will alleviate the housing crisis and warns against policies that will make it worse,” Ms Wawn concluded.

Media contact: Dee Zegarac, National Director, Media & Public Affairs

0400 493 071 | dee.zegarac@masterbuilders.com.au