What changed in 2025
Residential approvals were one of the clearer improvement signals during 2025. In January 2025, ABS reported that the seasonally adjusted total number of dwellings approved rose 6.3% (to 16,579). The lift was led by a stronger rise in approvals for private sector dwellings excluding houses (apartments and other multi-unit dwellings), alongside a smaller rise in house approvals.[1]
The ABS media release on the same data emphasised the same pattern: multi-unit approvals drove the overall rise and reached their highest level since December 2022.[2]
Why multi-unit approvals mattered
Multi-unit delivery is one of the primary channels for increasing housing supply in major metropolitan markets. The shift in approvals during early 2025 therefore carried more weight than a single month’s headline result: it suggested activity was returning in the segment that had been most constrained by feasibility and project risk in prior periods.
Momentum into the year
HIA’s commentary on the ABS release described approvals as strengthening into 2025, including improvement when comparing the three months to January 2025 with the same period a year earlier, and noted that the lift was occurring prior to the first cash-rate cut of 2025.[3]
Why approvals didn’t close the supply gap
Approvals are an early indicator, but delivery depends on the conversion from approval to commencement and then to completion. Throughout 2025, commentary continued to point to constraints that can slow that conversion: feasibility and finance, construction capacity, planning and servicing timelines, and risk pricing.
HIA noted that multi-unit approvals had lifted from weak levels but highlighted ongoing barriers linked to land, construction and investment, alongside the broader context of housing supply shortfalls.[3] ACIF’s May 2025 forecasts similarly described the residential recovery as improving, while flagging ongoing challenges including materials costs, planning delays, skills shortages, productivity issues and solvency risk.[4]
State variation (high level)
Residential conditions in 2025 were not uniform. HIA’s analysis of the January 2025 approvals data highlighted state-by-state differences in detached approvals over the three months to January 2025, with some states contributing more strongly to the national lift and others remaining weaker.[3]
Heading into 2026
From a 2026 vantage point, the practical watchpoints remain straightforward: whether multi-unit feasibility improves enough to sustain approvals momentum, whether approvals translate into starts at a higher rate, and whether workforce and planning bottlenecks ease quickly enough to lift completions.