Fresh ABS data has revealed a dwelling boom across the nation, although persistent supply barriers continue to threaten national housing goals.
The Australian Bureau of Statistics’ (ABS) Building Activity report for the 2025 September quarter has captured a rebound in new home starts, even as total volumes lag behind the required pace needed to meet federal government housing targets.
The data, released on Wednesday (21 January), revealed builders across the nation had a stronger pipeline in the September quarter, starting work on 48,778 new dwellings in seasonally adjusted terms.
This represents a 6.6 per cent increase from the June quarter and 3.2 per cent up on the same quarter in 2024.
Private sector houses led the way, with 28,485 commencements, marking a 6.9 per cent rise over the quarter (and 3.2 per cent over the year).
Meanwhile, other residential units, including apartments, grew 3.5 per cent to reach 18,747, adding substantial momentum to multi-unit projects in urban centres. This markes the highest level in four years.
In trend terms, the number of dwellings commenced was 48,376 dwellings (a 3 per cent quarterly gain and a 12.8 per cent increase compared to September 2024).
On an annual basis, private residential units outside of houses (i.e. apartments) grew by nearly a quarter (23.5 per cent), significantly outpacing the 3.2 per cent growth in houses.
NSW topped the states with 12,153 starts, closely trailed by Victoria at 13,415, and Queensland at 10,869.
South Australia contributed 3,718, and Western Australia added 5,742.
The data also showed solid regional contributions, which highlight a broad-based revival after the sector’s rough stretch from pandemic highs of 66,627 total starts in June 2021 down to a low of 37,881 in September 2023.
Completions show strength with soft spots
On the completions front, the quarter delivered 44,242 dwellings in seasonally adjusted terms, climbing 7.5 per cent from June, yet edging down 1.2 per cent from the previous year.
There was a slight dip in private house completions (which fell 1.9 per cent to 27,066 units), yet this was countered by a 30.7 per cent jump in other residential completions to 16,327.
In original terms, 45,451 dwellings were completed, down 1.2 per cent annually, while a pipeline of 230,003 units remains under construction, including 87,323 houses.
Work values reach new heights
Financially, the sector hummed with activity as the total value of building work soared to $43.2 billion in seasonally adjusted chain volume measures (using a 2023–24 base), delivering a 3.8 per cent quarterly lift and 6.5 per cent annual growth.
New residential buildings drove much of the action, hitting $22.9 billion after a 4.3 per cent rise from June and an 8.2 per cent year-on-year advance, breathing fresh energy into home construction projects nationwide.
Alterations and additions to existing homes grew steadily by 1.7 per cent to $3.7 billion, catering to renovation demands, while non-residential work advanced 3.7 per cent to $16.6 billion.
Trend chain volumes painted a consistent scene at $42.8 billion overall, with new residential up 1.8 per cent to $22.6 billion, capping a multi-year climb from the rate-hike squeezes of 2022–24.
Experts welcome uptick, yet sound alarm on mounting barriers
The Housing Industry Association (HIA), a national body for the residential building industry, greeted the ABS data with measured optimism, yet stressed the figures were nowhere near required numbers to meet the National Housing Accord target of building 1.2 millions by 2029.
“Lower interest rates have seen the volume of new homes commencing construction increase, but they still remain well below the government’s target,” said HIA senior economist Maurice Tapang.
He noted the latest figures came in beneath the “average volume commenced over the past decade”.
“The volume of home commencements remains below the 240,000 new homes per annum needed to build to the Australian Government’s target of 1.2 million homes over five years,” he said.
However, federal housing minister Clare O'Neil MP, highlighted that quarterly dwelling commencements were "now 17.2 per cent higher than it was at the start of the National Housing Accord period".
She reflected that while housing completions were "not where we want them to be", the federal minister said this was due to "the flowthrough of lower housing approvals from a few years ago, following post‑pandemic increases in construction costs and labour shortages".
“Housing supply is starting to turn the corner, with more home building starting, more tradies on the tools, and ultimately more homes built for Australians.
“Building more homes is the only way to make housing more affordable long term, and that’s exactly what this Government is focused on doing.”
Several commentators have flagged that housing supply will largely be met by apartments, rather than freestanding houses.
HIA's Tapang explained: "Apartment construction remains well below the volume commencing construction a decade ago and is one of the keys to increasing supply.”
He urged state and federal governments to reduce the mounting costs attached to producing new builds and said supply would only increase by enacting effective delivery methods.
“Demand is not the challenge. Delivery is. Land supply, infrastructure timing, planning bottlenecks and workforce capacity will shape the 2026 experience more than interest rates," he concluded.
Meanwhile Cameron Kusher, the former head of research at CoreLogic Australia, said the ABS data showed Australia was “nowhere near close to completing enough dwellings to hit the Housing Accord target”.
“Under the Housing Accord target, we should be seeing 60,000 dwelling completions nationally each quarter or 240,000 completions each year. Over the first 12 months of the Housing Accord period 174,732 dwellings were completed, a shortfall of 65,268 dwellings,” he said.
“Given the shortfall of completions over the first year of the Housing Accord period, we need to now be completing 256,317 new dwellings each year (up from the 240,000 original target) which equates to 64,079 completions each quarter and it won’t surprise you to find out there were not 64,123 dwellings completed over the September 2025 quarter.
“If you assume you need to commence 60,000 new dwellings each quarter for five years to hit the Housing Accord target, we’re way behind where we need to be.”
[Related: Construction costs lift despite annual increases hitting new lows]
