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The latest Australian Bureau of Statistics (ABS) data on Building Approvals for March 2025 has shown the total number of dwellings approved fell 8.8 per cent during the month to 15,220 in seasonally adjusted terms.
This followed a decrease of 0.2 per cent (revised) recorded in February. However, this was still 13.4 per cent above the number of dwellings approved in March 2024.
In seasonally adjusted terms, private sector house approvals recorded both monthly and annual declines, down by 4.5 per cent on February and 3.3 per cent on March 2024, to 8,804. Meanwhile, private sector dwellings excluding houses saw a 15.1 per cent decrease month on month but an annual increase of 47.1 per cent.
On a state-by-state basis, approvals for total dwellings fell the most in Tasmania (42.2 per cent), followed by Victoria (31.6 per cent), Western Australia (20.5 per cent), and South Australia (11.9 per cent), while approvals for NSW and Queensland rose by 19.6 per cent and 5.8 per cent, respectively.
The ABS revealed the data for private sector houses was mixed, with falls recorded in Victoria (10 per cent), Queensland (8 per cent), and NSW (2.5 per cent), and increases in Western Australia (10.3 per cent) and South Australia (4.6 per cent).
The total value of building approvals increased by 9.4 per cent to $15.59 billion in March, rebounding from a 4.7 per cent decline in February.
However, the value of total residential building dropped by 7.6 per cent to $8.98 billion. This was driven by an 8.6 per cent fall in new residential building, which totalled $7.81 billion, and a 0.7 per cent decrease in alterations and additions, down to $1.16 billion.
In contrast, non-residential building approvals surged by 46.0 per cent to $6.61 billion, following a sharp 21.9 per cent decline the previous month.
While approvals fell monthly, HIA senior economist Tom Devitt said that new homes approved for construction were up 20.8 per cent on a year earlier, equating to 48,620 approvals.
“Much of the improvement over the last year has come from multi-unit approvals, which were up by 52.6 per cent on the very low levels a year earlier, while detached approvals are up by a more modest 4.2 per cent,” Devitt said.
“Despite the improving numbers over the last year, building approvals are still running at around 180,000 per year, well short of what is required to commence 1.2 million homes over 5 years.”
Devitt said that many recent approvals are likely to be “faux” approvals, meaning that apartment projects already approved will need to seek re-approval and comply with new construction code due to a change in market conditions.
“There are a very large number of apartments approved for construction across capital cities, but only a small number of these will commence construction. Punitive taxes that effectively exclude certain investors from the market add further time and difficulty in finding buyers for new apartments, even after they have been approved,” Devitt said.
“Multi-unit activity needs to be twice as large as recent levels for the Australian government to achieve its target of 1.2 million new homes over five years.
“As it stands, the government is set to fall almost 20 per cent short of its own target and a few interest rate cuts from the RBA won’t be sufficient to increase the supply of homes to meet the 1.2 million target.”
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