After hitting a near three-year high in November, building approvals slid back in December 2025 as apartment projects swung lower.
According to seasonally adjusted data from the Australian Bureau of Statistics (ABS), the total number of dwellings approved fell 14.9% in December 2025 to 15,542.
The latest numbers follow November’s result, which recorded the highest level of building approvals since February 2022.
According to the data, the December drop was largely driven by a 29.8% fall in approvals for private dwellings excluding houses — a category that includes townhouses, apartments, semi-detached, row and terrace houses.
Total building approvals fell 14.9% in December 2025 to 15,542. Picture: Getty
This segment continues to deliver volatile results. In November, it led the overall increase in approvals, largely due to a 63.7% surge in apartment approvals alone.
But in December, apartment approvals fell 37.6% to 3470 dwellings — also 14% lower than the average over the past 12 months.
REA Group executive manager of economics Angus Moore said higher-density approvals tend to fluctuate sharply from month to month.
"Higher density approvals are volatile from month-to-month because apartment projects can be large and approved at similar timing, meaning we can see a large number of approvals in a given month based on the timing of when one large project is approved,” Mr Moore said.
“This makes it important to look beyond month-to-month and instead look at the longer trend. The longer trend is positive, as approvals have been trending up over the past couple of years. Even so, we're still well behind the pace we'd need to hit the national cabinet's target of 1.2 million homes over five years."
Approvals for detached houses rose slightly by 0.4% to 9487 dwellings, following a 0.8% rise in November, although results varied significantly across the states, according to ABS head of construction statistics Daniel Rossi.
“South Australia recorded the largest rise, up 13.1%, to the highest level since April 2023. Western Australia rose 0.4% to the highest level since July 2021,” Mr Rossi said.
“In contrast, New South Wales had the largest fall in December, down 5.5%.”
Consistency remains the challenge
While December delivered a pullback, annual approvals showed improvement overall.
According to analysis from the Property Council of Australia, total dwelling approvals for 2025 reached 195,731 — a 12.8% increase from 172,457 approvals in 2024.
However, the industry body said December’s figures reinforced the “stop-start reality” facing apartment construction, with more consistent approvals needed at scale.
Apartment approvals alone fell 37.6% to 3470 dwellings for December 2025. Picture: Getty
“November showed what’s possible but December shows how quickly the numbers can swing back,” Property Council group executive for policy and advocacy Matthew Kandelaars said.
“The annual picture is improving, but we’re not going to hit national targets on monthly surges — we need a consistent pipeline of feasible projects that can move from approval to site.”
Mr Kandelaars said the overall trend for apartments remained critical to improving housing supply.
“Over the full calendar year, apartment approvals were up, and that’s critical because multi-unit housing is where we can add supply at scale in well-located areas,” he said.
The Housing Industry Association (HIA) said that despite the pickup in approvals over 2025, the total still fell well short of the estimated 240,000 new homes required.
“Households cannot live in an approval, and these projects can only materialise if there is sufficient investment, infrastructure and incentive to bring them to market,” HIA chief economist Tim Reardon said.
“Governments need to remove the additional costs imposed on land development and new home building if we are to achieve housing sufficiency.”
Master Builders Australia also said higher-density construction would be essential to lifting housing supply.
“Higher density home building offers our best chance of meeting the Housing Accord target,” Master Builders Australia chief economist Shane Garrett said.
“When conditions are right, it can be rolled out quickly and on a large scale. However, doing so requires us to get conditions right around build times, supply chains, costs and, importantly, labour availability.”
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