National approvals surpassed 52,000 for the first time since 2018, driven by a surge in regional activity
Nearly 53,000 new homes received planning approval in the June quarter, marking the strongest result in eight years, according to new analysis by KPMG Australia.
Approvals rose 3.5% over the three months to June compared to the previous quarter, reaching 52,793 nationally.
The increase was largely driven by growth outside capital cities, where approvals exceeded 15,760 — the highest regional figure since September 2021 and up from approximately 14,470 in the prior quarter.
"We haven't seen approvals at this level across regional Australia since the COVID boom of 2020 and 2021," said Terry Rawnsley (pictured right), senior economist at KPMG Australia.
"The rise in regional approvals reflects a broad economic shift underway across Australia, with many regional and smaller cities continuing to attract population growth, workers and investment. As those communities expand, housing supply will be critical to sustaining that economic momentum. While these are positive signs, we still aren't producing enough homes at the right price points to ease housing affordability, so more work is still required."
Quarterly Building Approvals, Major Regions (Seasonally Adjusted)
Among the capital cities, Sydney and Brisbane recorded the strongest growth. Approvals in Sydney increased 15.4% over the quarter, while Brisbane posted a 14.5% rise.
"Sydney has been able to sustain an average of 9,000 dwellings for the past seven quarters, so there is the momentum in that market is encouraging," Rawnsley said. "Housing approvals in Brisbane and Sydney are accelerating, and most markets are still running above their long-term averages."
Melbourne recorded 9,921 approvals for the June quarter, a 12% decline following a 12.9% rise in the prior period, and below the city's long-term average of 11,397.
"While Melbourne took a breather this quarter, the broader trend remains positive. Australia's two largest housing markets, Sydney and Melbourne, are still generating almost 20,000 approvals between them each quarter, while Brisbane continues to establish itself as one of the nation's fastest-growing residential development markets," Rawnsley said.
Adelaide posted a 5% gain in approvals, outperforming its long-term average. Perth saw approvals ease 11.9% to 5,458, though the figure remains above the city's long-term average of 4,328. Hobart and Darwin also recorded marked increases in the quarter.
KPMG's recent Enterprising Cities report found that smaller capital cities retain a relative affordability advantage over larger centres, reinforcing the case for ongoing housing development to support population and economic growth.
Despite the broadly positive headline figures, Rawnsley cautioned that approvals alone will not resolve the national housing shortage.
"Planning approval is only the first step," he said. "Developers still need the labour and materials to turn approvals into homes.
"Delivering more homes requires more construction workers, creating a catch-22 for many markets that are already struggling to accommodate additional workers. We are in this position where we need more construction workers to help deliver more housing, but we are faced with the situation where we can't house additional workers in many cities. The next hurdle is capacity. As approvals increase, the construction sector will need a larger workforce to convert projects into housing supply."
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