June figures show a monthly rebound driven by units, yet industry warns of growing headwinds ahead
Total dwelling approvals rose 7.2% in June, with the annual pace reaching 8.9%, according to Australian Bureau of Statistics data released on Thursday.
The monthly result exceeded expectations — Westpac had forecast a 2% decline, while the broader market anticipated a 0.5% fall — with the upside driven by a sharp rebound in unit approvals.
Private detached dwelling approvals edged up 0.4% for the month, remaining above 10,000 for the sixth consecutive month. Private unit approvals reversed three months of weakness, climbing 17.8%, led by high-rise projects. Westpac's seasonally adjusted estimates showed high-rise approvals across both private and public sectors rising 76% month-on-month, while low-to-mid-rise approvals fell 7.3%.
Queensland posted the strongest state result, with private dwelling approvals rising 40.3%, supported by both houses and units. New South Wales grew 11.6% and Western Australia gained 9.9%. South Australia fell 10.0% and Victoria declined 18.5%, with weakness concentrated in unit approvals.
Despite the monthly improvement, the figures highlight the scale of the gap under the National Housing Accord's target of 1.2 million new homes by 2029. Since the accord's commencement, just 393,426 dwellings have been approved nationally — against the approximately 500,000 that would be needed to remain on track. Annual approvals for the 12 months to 30 June 2026 totalled 204,649, up from 188,777 the prior year, but still well below the estimated 250,000 annual approvals required to sustain sufficient completions.
"The big message from today's figures is that 47,750 fewer homes were built over the year compared with what we needed, and marks two consecutive years of Accord target shortfall," said Shane Garrett (pictured right), chief economist at Master Builders Australia.
"Earlier this week, the Reserve Bank governor confirmed that the housing market is weaker as a result of higher interest rates and recent government policy changes. Interest rate hikes also have a knock-on effect for non-residential work. We need to restore favourable conditions for the sector and the country."
Housing Industry Association chief economist Tim Reardon (pictured right), however, argued that the June data still reflected approvals patterns from the second half of last year and that the impact of recent interest rate increases had not yet fully filtered through.
He warned that federal Budget changes to self-managed superannuation funds — which will prevent SMSFs from borrowing to purchase new homes — would harm rental supply.
"Every housing policy should be assessed against its ability to get us closer to 1.2 million homes, and on that front, the worst own-goal in this year's Budget was the changes to self managed super funds," Reardon said.
Meanwhile, Property Council of Australia policy and advocacy group executive Matthew Kandelaars (pictured right) acknowledged the approvals increase, but cautioned that approved projects still required commercial viability before construction could begin. "Shifting tax settings, rising costs, workforce shortages, infrastructure constraints and regulatory complexity continue to place pressure on housing delivery across the country," he said.
Kandelaars cited a recent Productivity Commission interim report as confirming industry-observed bottlenecks. "The Productivity Commission has confirmed what the industry sees every day — when projects become harder, slower and more expensive to deliver, fewer homes get built," he said.
Westpac economist Luka Belobrajdic noted that while improving homebuyer sentiment and recently announced tax measures may offer some support to dwelling demand, recent RBA cash rate increases and persistently elevated construction costs were expected to remain headwinds for the sector.
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
