Building Approvals Just Hit a 4-Year High
Australia approved 195,730 new dwellings in 2025 — a 12.8% jump over 2024 and the highest annual total since 2021. After years of declining activity, the construction pipeline is finally filling back up.
The data, confirmed by both the ABS and the Housing Industry Association, signals that the housing recovery is underway. But it’s uneven across states, and the country still has a long way to go to close a widening supply gap.
The Numbers
The headline figures paint a clear picture of a market turning a corner:
- Total dwellings approved in 2025: 195,730
- Year-on-year increase: 12.8%
- Multi-unit dwellings approved: 82,330 (up 31.4% from 2024)
- Construction market forecast for 2026: AUD $193.2 billion (6.9% growth)
Detached housing approvals grew steadily, but the real story is in multi-unit housing. Apartments and townhouses bounced back hard after several years of subdued activity.
State-by-State Breakdown
Not all states are recovering at the same pace. Queensland, South Australia and Western Australia have led the charge, while New South Wales and Victoria are only now beginning to pick up.
| State | Recovery Status | Notes |
|---|---|---|
| Western Australia | Leading | Strongest pipeline nationally. On track to surpass NSW in engineering construction by end of decade. |
| Queensland | Leading | Strong detached and multi-unit growth across SEQ and regional areas. |
| South Australia | Leading | Steady growth supported by relative housing affordability. |
| New South Wales | Recovering | Lagged earlier but approvals now trending upward. |
| Victoria | Recovering | Slowest of the major states but conditions are improving. |
WA stands out as the national construction leader. The state’s strong population growth and resource-sector investment have pushed building activity well above pre-pandemic levels. Industry forecasters suggest WA could overtake NSW for total engineering construction value by the end of the decade.
For state-specific licence requirements, check our guides for Queensland, NSW and Victoria.
The Multi-Unit Bounce
Multi-unit approvals — apartments, townhouses and units — surged 31.4% in 2025 to reach 82,330 dwellings. This is the segment that had been hardest hit by rising construction costs and feasibility challenges.
What changed? Higher unit sale prices have started to close the gap between development costs and expected returns. As sale prices catch up, more projects are getting the green light from financiers.
The HIA expects the multi-unit sector to keep improving through 2026 as feasibility continues to strengthen across major capital cities. This means more work for licensed builders, plumbers, electricians and finishing trades in medium and high-density construction.
Still a Long Way to Go
Despite the positive trend, Australia remains roughly 2 million homes short of where it needs to be. The federal government’s target of 1.2 million new homes over five years is ambitious, and current approval rates — while improving — are not yet on track to meet it.
Interest rates remain the key variable. The pace of recovery in 2026 depends heavily on whether the RBA delivers further rate cuts. Lower rates would improve borrowing capacity for buyers and reduce financing costs for developers, unlocking more projects.
The construction market is forecast to grow 6.9% in 2026, reaching AUD $193.2 billion. That growth depends on rates moving in the right direction and supply chain pressures continuing to ease.
What This Means for Homeowners
A busier construction market is good news for housing supply, but it also means more pressure on the available workforce. Here’s what to keep in mind:
- More tradies will be working. A growing pipeline means builders, subbies and specialist trades are in higher demand. Plan ahead and book early for major projects.
- Check licences before you hire. A busy market attracts unlicensed operators looking to cash in. Use our free licence search to verify any tradesperson before signing a contract.
- Get multiple quotes. Even in a recovering market, pricing varies significantly between contractors. Three quotes is the minimum — read our guide to hiring a licensed builder for a full checklist.
- Watch for licence conditions. Not all builder licences cover all work types. Make sure your builder’s licence class matches the scope of your project.
The recovery is real, but it will take years of sustained building activity to address the housing shortfall. In the meantime, doing your homework on who you hire has never mattered more.