A sharp reversal in multi-density projects drove December’s decline, reversing the previous month’s gains.
Dwelling approvals tumbled 14.9 per cent in December to 15,542, according to data released by the Australian Bureau of Statistics (ABS) on Wednesday (4 February), as an apartment-driven slump erased November’s strong gains.
The monthly decline was propelled almost entirely by a 29.8 per cent crash in private dwellings excluding houses – the apartment and town house category – which collapsed to 5,855 approvals after surging 29.6 per cent in November, its highest level since June 2018.
By contrast, private sector house approvals edged up 0.4 per cent to 9,487 dwellings and now sit 5.7 per cent higher than a year ago, demonstrating relative stability amid the volatility in higher-density projects.
ABS head of construction statistics, Daniel Rossi, explained the apartment whipsaw by noting that December’s fall came directly after an exceptional November.
“The drop in total dwellings was driven by a 29.8 per cent fall in approvals for private dwellings excluding houses. This follows a 29.6 per cent rise in this series in November,” Rossi said.
He added that context was critical when interpreting the December figures.
“While the fall in December was large, it came off the back of last month which had the highest number of private sector dwellings excluding houses approved since June 2018,” he said.
Apartment volatility explained
In original terms, the volatile apartment series plunged 37.6 per cent to 3,470 dwellings in December, following November’s 63.7 per cent surge.
Apartments are now 14 per cent below their 12-month average, signalling persistent weakness beyond seasonal factors.
Victoria bore the brunt of December’s apartment collapse, with the state recording a dramatic contraction in multi-density approvals.
“Victoria led the fall in apartment approvals in December,” Rossi said.
“Victoria saw only 339 apartments approved this month compared with 1,496 in November.”
That represents a 77 per cent monthly crash in Victorian apartment approvals, contributing heavily to the state’s 32.2 per cent overall decline in total dwelling approvals to 3,514.
Houses show resilience amid multi-density drop
While apartments dominated December’s headline decline, private sector house approvals rose modestly across the month and showed stronger momentum on an annual basis.
Rossi highlighted diverging state performance for detached housing, with South Australia and Western Australia recording multi-year highs.
“South Australia recorded the largest rise, up 13.1 per cent, to the highest level since April 2023,” he said.
Detached housing approvals in South Australia will likely rise further, with the Albanese and Malinauskas governments on Saturday (31 January) announcing an $801.5 million deal to unlock 17,000 new homes, with almost 7,000 earmarked for first home buyers.
“Western Australia rose 0.4 per cent, to the highest level since July 2021. In contrast, New South Wales had the largest fall in December, down 5.5 per cent,” Rossi said.
South Australia’s house approvals climbed to 895, while Western Australia reached 1,652 – significant milestones for their respective construction pipelines.
NSW, which had led house approval growth in November with a 4.3 per cent rise, reversed course to post the sharpest decline among major states.
Queensland saw house approvals slip 2.8 per cent to 2,074, while Victoria managed a 2.8 per cent gain to 2,697.
State breakdown and trend analysis
In seasonally adjusted terms, total dwelling approvals fell across most jurisdictions: Victoria (-32.2 per cent), Queensland (-16.3 per cent), NSW (-14.3 per cent), Western Australia (-1.9 per cent), and South Australia (-0.8 per cent).
Tasmania was the sole state to record growth, with approvals up 11.3 per cent.
Trend estimates, which smooth monthly volatility, paint a more measured picture.
Total dwellings declined just 0.2 per cent on a trend basis to 16,489, though the annual trend remains negative at 6.1 per cent.
Houses continued their upward trajectory, rising 0.4 per cent on trend and sitting 3.7 per cent higher year on year.
Apartments fell 0.8 per cent on trend, but remain 14.3 per cent above year-ago levels, indicating the sector has expanded substantially over the past 12 months despite December’s sharp monthly reversal.
[Related: Deal to unlock 17k new SA homes unveiled]
