Australia Residential Building Approvals Rise 8% in Q4

Seasonally adjusted new residential construction starts in Australia increased by 8% to 53,567 units during the fourth quarter of 2025.

This growth in construction activity coincides with a significant rise in building approvals for February 2026. According to data released by the Australian Bureau of Statistics on April 1, 2026, the total number of dwelling units approved in February 2026 rose 29.7% to 19,022.

February 2026 Approval Trends

The February 2026 figures show a sharp divergence between different types of residential projects. Private sector dwellings excluding houses, which include townhouses, semi-detached homes, and apartments, saw a 101.2% increase, reaching 8,922 approvals.

In contrast, private sector house approvals remained relatively flat, recording a 0.2% increase to 9,847 units. On a trend basis, total dwelling units approved for February 2026 stood at 17,566, representing a 1.2% increase.

The financial value of residential building activity also saw substantial growth. The value of total residential building rose 30.8% to $12.50 billion. This total was composed of an 11.21 billion increase in new residential work, which rose by 35.9%, and a 1.2% decrease in alterations and additions, which fell to $1.29 billion.

Non-residential building activity moved in the opposite direction, with the total value falling 4.4% to $7.93 billion in February 2026.

Market Volatility and National Targets

The current growth follows a period of volatility in 2025. In July 2025, the total number of building approvals fell 8.2% to 15,769. That decline was primarily driven by a 22.3% drop in approvals for private dwellings excluding houses.

During July 2025, detached house approvals rose 1.1% to 9,288. At that time, New South Wales and Western Australia recorded the strongest rise in private sector house approvals, both increasing by 3%, while Victoria gained 1.3%. South Australia was the only state to record a fall in house approvals in July 2025, decreasing by 6.1%.

These fluctuations occur as Australia attempts to meet the targets set by the National Housing Accord. The accord aims for the creation of 1.2 million new homes by 2029. To reach this objective, the country requires the construction of 20,000 homes every month.

July’s numbers were “a disappointing step back after two months of rising home approvals”

Property Council of Australia

Regional Performance and Supply Constraints

Regional data indicates varying levels of market strength across the country. According to the UDIA Housing Index for the December quarter of 2025, Western Australia remained the strongest housing market nationally.

Most other states experienced either flat or weakening conditions during the December 2025 quarter. The UDIA report also noted that supply constraints remain evident across the market.

The trend data for February 2026 suggests a continuing upward trajectory for non-house dwellings. Private sector dwellings excluding houses showed a trend increase of 1.7% to 7,422 units, while private sector houses showed a trend increase of 0.9% to 9,840 units.