Building approvals on rise but still not enough – Master Builders

NEW home building approvals are on the increase, according to the Australian Bureau of Statistics.

But the country is still a long way from hitting its 1.2 million Housing Accord target, the Master Builders Australia says.

MBA chief economist Shane Garrett said the tally for the year up to May was the biggest total for any 12-month period since early 20 23.

The 3.2 per cent increase in new home building approvals in May 2025 was largely due to the 9.0 per cent gain in higher density building approvals during the month, he said.

“Approvals for new detached houses rose by the smallest of margins (+0.1 per cent) – their highest level in 8 months,” he added.

“Over the year to May 2025, 182,894 new homes have been approved across Australia. This is the biggest total for any 12-month period since early 2023.

“However, if homebuilding were to remain at this pace, it would only deliver just 915,000 new homes in five years – representing a 285,000-home shortfall relative to the National Housing Accord’s target.

“Rents are still rising, but the speed at which they are doing so has slowed.

“The gradual increase in the delivery of higher density homes is partly behind this.

“Conditions for renters could be improved further if we achieve further gains in higher density home building.”

MBA chief executive Denita Wawn said productivity in the building and construction industry has fallen 18 per cent over the last decade, even as housing costs have surged by over 40 per cent.

“Builders are grappling with ongoing supply chain disruptions, rising material costs, and fixed-price contracts that no longer reflect market realities.

“Boosting productivity is essential to building a better, safer and fairer industry. It helps deliver quality outcomes, improves safety standards and keeps costs down.

“It’s not governments that build homes, it’s private businesses. What we need is for them to clear the path so we can get on with the job.”