Housing approvals rebound, but still behind targets

BUILDING approval levels rose during the final month of the financial year, but figures remain well short of the national housing target.

Data from the Australian Bureau of Statistics on Thursday revealed approvals rose by 7.2 per cent in June to 18,328 dwellings.

After an 11 per cent drop in May, approvals for private dwellings excluding houses increased by 17.8 per cent for the month.

The bureau’s head of construction statistics Daniel Rossi said there were also increases for housing approvals.

Private sector house approvals rose 0.4 per cent in June, marking the sixth month in a row with more than 10,000 private sector houses approved across Australia,” he said.

The figures revealed just over 205,000 properties were approved to be built in the 2025/26 financial year, a rise of 9.2 per cent on the previous year.

“The increase saw dwellings approved in the 2025/26 financial year at its highest level since 2020/21,” Mr Rossi said.

Private-sector dwellings, excluding homes, are at their highest level since 2017/18.

However, the annual rate of building approvals is still short of the 253,000 needed to be built each year for national housing accord targets to be met.

The federal government laid out a target of 1.2 million homes being built by June 30, 2029, of which 20,000 are new affordable homes.

Master Builders Australia chief economist Shane Garrett said high density dwelling approvals were behind the June uptick, after three straight months of decline.

“The big message from today’s figures is that 47,750 fewer homes were built over the year compared with what we needed, and marks two consecutive years of Accord target shortfall,” he said in a statement.

“Interest rate hikes also have a knock-on effect for non-residential work. We need to restore favourable conditions for the sector and the country.”

Property Council of Australia executive Matthew Kandelaars said the increase in June was encouraging, but the focus needed to shift to ensuring homes were completed.

“Approvals are an important indicator of future activity, but they are only the first step in the delivery process,” he said.

“Today’s increase in approvals is welcome, particularly for higher-density housing, but approvals alone do not build homes.”

It comes as Finance Minister Katy Gallagher said housing changes in the budget were having an impact on inflation and on property prices.

Reforms in the federal budget limited negative gearing to new homes from July 2027, while discounts to capital gains taxes have also been reduced.

“We had a very modest impact on the price of housing, and other factors obviously play into that,” she told ABC Radio.

“We have had a number of interest rates increases this year that will impact those.”