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Throughout the month of May, total dwellings approved rose 3.2 per cent to 15,212, after falling 4.1 per cent in April.
As reported by the Australian Bureau of Statistics (ABS), Victoria led the charge with private sector house approvals up 9.5 per cent over the month.
Other states such as NSW and Western Australia saw decreases of 5.4 per cent and 7.6 per cent, respectively.
Private sector dwellings excluding houses (such as apartments) climbed 11.3 per cent in May, following a 19 per cent drop in April. This was 11.9 per cent higher than the same time last year.
NSW reported the largest increase in apartment approvals with 2,274 approved in May, compared with 672 in April.
HIA senior economist Tom Devitt said the two interest rate cuts of 2025 are helping turn approval rates around.
“Two cuts to the cash rate have seen the volume of detached house building approvals rise to be 3.2 per cent higher than the same month last year,” he said.
“Building approvals have followed other leading indicators to show that new home buyers are increasingly returning to the market. With two interest rate cuts in the back pocket, and further cuts expected, more buyers are able to sign that contract for a new home build.”
Reforms helping turn the dial
One year into the government’s housing target, numbers are still well below what is needed. Despite this, progress is being made and reforms have injected some urgency.
Property Council of Australia CEO Mike Zorbas said the national housing target is a success as it has enabled housing reform across the country.
“We’re projected to be 262,000 homes behind the 2029 target but imagine the gap without these reforms – business as usual would have been even more painful,” said Zorbas.
“When we get to 2029, we’ll see which states have made it and which have not. The act of measuring gives us a better understanding of why some states are succeeding and some failing.”
Devitt urged state governments to reduce red tape that is diminishing the potential for further progress.
“Multi-unit commencements need to double from current levels in order to achieve the government’s housing targets. This is unlikely to occur if state governments continue to impose additional taxes on institutional investors,” said Devitt.
“The recent NSW State Budget commitment to guarantee apartment pre-sales will see a tangible increase in the commencement of apartments in Sydney.”
[Related: Housing affordability kept in check by lack of stock]
