Fresh figures have shown a sharp and widespread March pullback in approvals, prompting warnings Australia’s housing targets are drifting further out of reach.
The latest building approvals data has revealed a steep slowdown in new housing projects, sparking renewed industry warnings that the nation’s 1.2‑million‑home target by 2029 is sliding increasingly out of reach.
Seasonally adjusted approvals for total dwellings fell 10.5 per cent in March to 17,300 after a 31 per cent jump in February, while the trend series edged 0.5 per cent higher.
Private‑sector dwellings excluding houses dropped 26 per cent to 6,632 after more than doubling in February, while private‑sector house approvals rose 0.9 per cent to 10,194.
ABS head of construction statistics Daniel Rossi emphasised that the detached segment had quietly strengthened.
“Private sector house approvals gained to the highest level since November 2021,” he said.
On an unadjusted basis, apartment approvals fell 30.2 per cent to 3,768 dwellings, slipping 2.7 per cent below the average of the previous 12 months.
Semi‑detached dwellings – including town houses and terraces – provided a rare bright spot, with approvals lifting 0.6 per cent higher to 3,051.
Yet the national picture masked stark geographic differences.
Total dwelling approvals fell sharply in Victoria (-16.9 per cent) and Western Australia (-15.5 per cent), and also declined in Queensland (-6.4 per cent) and South Australia (-2.1 per cent).
NSW and Tasmania bucked the trend with rises of 3.2 per cent and 2.6 per cent, respectively.
For private‑sector houses, NSW (9.5 per cent) and Queensland (7.2 per cent) recorded solid gains, offset by declines in Western Australia (-8.6 per cent), South Australia (-6.2 per cent) and Victoria (-2.5 per cent).
O’Neil touts housing reforms as global shocks bite
The figures landed alongside the National Housing Supply and Affordability Council’s State of the Housing System report, which federal Housing Minister Clare O’Neil used to argue that supply growth was being disrupted by global turmoil.
O’Neil said the report “confirmed that Australia was making progress on housing supply, but that global pressures were creating fresh challenges that must be met.”
Before the conflict in the Middle East, the council was estimating around 980,000 new homes would be delivered over the National Housing Accord period to June 2029, 42,000 more than was forecast in its 2025 report.
Yet in its short‑term scenario, a period of elevated global uncertainty is estimated to trim supply by around 10,000 homes, while under a more prolonged disruption, it suggests 33,000 fewer homes could be delivered by mid‑2029.
O’Neil sought to counter that risk narrative by spotlighting the Albanese government’s push to speed up planning and environmental approvals.
She said the government was “making progress by cutting delays in environmental approvals through targeted reforms to the Environment Protection and Biodiversity Conservation Act.”
“Since August last year, the Government’s EPBC strike team has approved housing projects delivering more than 20,000 homes, tracking towards the target of 26,000,” she said.
According to O’Neil, that effort sits within a broader overhaul of how major projects are assessed.
She said the government was progressing “structural reform to the approvals system”, including establishing Australia’s first national Environment Protection Agency and creating “a new streamlined assessment pathway to reduce assessment timeframe.”
She added that the government had announced on Sunday (3 May) that it would invest $45 million over four years to “progress bilateral agreements with the states and territories.”
Building body warns of mounting shortfall and backlog
Industry, however, viewed the data as evidence that Australia was falling further behind on its housing objectives.
Master Builders Australia chief economist Shane Garrett drew attention to the abrupt reversal in multi‑unit activity, “which declined by 23.4 per cent during March.”
“We’re really depending on higher density homes to help us reach the Housing Accord target, it’s worrying that activity in that part of the market shrank sharply during March."
Speaking on Tuesday’s cash rate decision, he cautioned that “any further interest rate increases would make it tougher to bring new homes into existence.”
“Builders are reporting that impacts from the Middle Eastern conflict are making it considerably more expensive for them to undertake work, there is a danger that cost increases combined with higher interest rates could lead to market deterrence.”
Master Builders Australia CEO Denita Wawn pointed to in-house and government forecasts, which showed a “housing shortfall of more than 200,000 homes by the end of the National Housing Accord in 2029.”
Wawn said March's figures showed that a significant lag had opened up, noting that a "77,600-home backlog has already accumulated."
[Related: Apartment approvals roar back as housing target gap widens]
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