Key takeaways
Market sentiment is lagging the data. The numbers suggest the property cycle is turning despite ongoing negative commentary.
The spike in building approvals is misleading. It reflects a short-term rebound in unit approvals rather than a sustained lift in housing supply.
Australia faces a long-term housing shortage. Supply remains well below past peaks despite strong population growth, which will support prices over time.
The economy is stronger than widely perceived. Solid GDP growth and low unemployment continue to underpin housing demand and borrowing capacity.
Property remains a proven long-term performer. Well-located assets in capital cities have significantly outperformed other investments and should continue to benefit from structural trends.
There’s a pattern I’ve noticed over many property cycles.
When the data starts to turn, the narrative usually lags behind.
And that’s exactly where we find ourselves today.
The latest housing and economic figures suggest the Australian property market is entering its next phase, yet much of the public commentary is still anchored in fears around interest rates, affordability and construction headwinds and geopolitical problems.
Now I'm not suggesting that these issues aren’t real; they are.
But digging into some of the latest statistics suggests that the underlying story is more nuanced, and for investors, potentially more optimistic.
In this week's Property Insiders chats, Dr Andrew Wilson and I look at some of the latest statistics.
Building approvals just posted their biggest monthly jump in years - and that should matter to every property investor watching this.
The economy is growing faster than most people expected.
Auction clearance rates are holding up better than the headlines suggest.
And yet there are some serious structural supply problems quietly building beneath the surface that could shape property values for years to come.
Building approvals just bounced - but don't get too excited yet
Watch this week's Property Insider video as Dr Andrew Wilson explains how the February 2026 building approvals data from the ABS was striking at first glance.
Total dwelling approvals rose 29.7 per cent in February to 19,022, according to seasonally adjusted data.
That's a big number, but as Dr Andrew Wilson's analysis makes clear, the story is driven almost entirely by one volatile category - units and apartments.
The rise was driven by a 101.2 per cent increase in private dwellings excluding houses, following a 25.0 per cent fall in January and a 29.7 per cent fall in December.
So, what we're really seeing is a rebound from an unusually soft few months, not some sudden surge in construction activity.
Private sector house approvals - the more stable and reliable indicator - barely moved, rising just 0.2 per cent. That's essentially flat.
New South Wales recorded the largest rise in private sector house approvals, up 13.7 per cent to the highest level since December 2023, while Queensland had the largest fall in February, down 13.4 per cent.
Victoria led all states in total dwelling approvals, with 6,087 for the month, reflecting a number of large apartment projects flowing through the system there.
The longer-term picture tells a very different story
Here's what I think is the more important - despite the February bounce, the longer-term trend in new home building is deeply concerning for anyone who cares about housing supply.
And of course, not all properties that get building approval are eventually built. In today's high-interest, higher-cost environment, many new projects will not be financially feasible.
Sure, there have been a total of 195,434 dwellings approved over the past 12 months - a 9.0 per cent increase on the 12 months prior.
That sounds reasonable until you look at what the data shows across the full cycle.
Capital city annual dwelling approvals are currently sitting around 139,030 - roughly 26.6 per cent below the 2016 peak of 189,409.
And unit approvals specifically have fallen 42.9 per cent from their 2016 high of 110,448 to around 63,116 in the most recent 12-month data.
To put that in context, Australia's population has grown significantly since 2016 yet we're building far fewer homes per capita than we were nearly a decade ago, even as immigration-driven demand has returned strongly post-COVID.
The maths simply doesn't add up to a market where supply solves the affordability problem any time soon.
This is one of those structural realities that I think patient, long-term investors understand better than anyone.
The shortage of well-located housing in our capital cities is not a short-term problem. It's a multi-year, arguably multi-decade phenomenon that underpins the case for quality residential property investment in a way that no amount of short-term sentiment shifts can easily override.
The economy is in better shape than many people think
Watch this week's Property Insider chat as Dr Andrew Wilson explains how our economy is quietly supporting property.
In fact, one of the more underappreciated aspects of the current cycle is the strength of the broader economy.
Dr Wilson highlights how solid Australia's GDP growth has been.
- Also read:National Weekly Auction Report – April 25th 2026 | Auction Markets Higher Over ANZAC week
- Also read:This week’s Australian Property Market Update – Latest Data, State by State April 21st 2026
- Also read:Adelaide housing market update | April 2026
- Also read:Latest Property Price Forecasts Revealed. Australian Property Market Outlook 2026: Where To Now After The Rate Rise.
- Also read:Brisbane housing market update | April 2026
The ABS national accounts data shows annual GDP growth coming in at 2.6 per cent in the most recent full-year reading, with quarterly growth hitting 0.8 per cent - a clear acceleration from the sluggish 0.2 per cent we saw earlier in the cycle.
To appreciate how good this actually is, Dr. Wilson makes an important historical comparison.
When unemployment was at 11.1 per cent and interest rates were at 17.5 per cent in the early 1990s recession, the economy was contracting sharply.
Today, with unemployment sitting around 4.3 per cent and the cash rate at 4.15 per cent, we're still generating positive quarterly economic growth.
The resilience of the Australian economy through this rate cycle has been genuinely impressive.
This matters for property investors because economic growth supports employment, income growth, and ultimately the capacity of households to service mortgages and pay rent.
A growing economy is the foundational condition for a healthy property market, and that foundation remains intact.
Property has massively outperformed other asset classes over time
One chart in Dr. Wilson's analysis this week is the long-run comparison of house prices versus the sharemarket.
Since 2007, Sydney house prices have risen 204.1 per cent, Brisbane 168.5 per cent, Adelaide 165.9 per cent, and Perth 258.3 per cent. Melbourne, despite its recent underperformance, is still up 142.0 per cent over that period.
Compare that with the All Ordinaries, which is up just 37.3 per cent over the same timeframe - and that's with the benefit of dividends not being captured in that capital growth comparison.
A one-year term deposit has returned 81.46 per cent in cumulative terms.
This long-run comparison doesn't mean every property market or every property type will produce those returns going forward.
However, it does mean that the argument for well-selected residential property in major Australian capital cities - held through multiple cycles and properly leveraged - has a very strong historical basis.
Auction markets are holding up well, even allowing for ANZAC week
Capital city auction clearance rates were generally higher over the past week, with listing numbers low due to the distractions of ANZAC week.
The national weekend auction market reported an average clearance rate of 60.3% over the past week which was higher than the 56.5% reported over the previous week and similar to the 61.0% reported over the same week last year.
Auction numbers will ramp up significantly over coming weeks free from the distractions of the lengthy April holiday month.
Property has massively outperformed other asset classes over time
One chart in Dr. Wilson's analysis that always gets attention is the long-run comparison of house prices versus the sharemarket.
Since 2007, Sydney house prices have risen 204.1 per cent, Brisbane 168.5 per cent, Adelaide 165.9 per cent, and Perth 258.3 per cent. Melbourne, despite its recent underperformance, is still up 142.0 per cent over that period.
Compare that with the All Ordinaries, which is up just 37.3 per cent over the same timeframe - and that's with the benefit of dividends not being captured in that capital growth comparison.
A one-year term deposit has returned 81.46 per cent in cumulative terms. Even the US Dow Jones at 258.3 per cent only just keeps pace with Perth.
This long-run comparison doesn't mean every property market or every property type will produce those returns going forward.
It does mean that the argument for well-selected residential property in major Australian capital cities - held through multiple cycles and properly leveraged - has a very strong historical basis.
Especially when you take into account the extra advantage of gearing.
What this means for investors
When you stand back and look at this data as a whole, a few things become clear to me.
The supply picture continues to support property values in our major cities.
We are not building enough homes relative to population growth and household formation, and this structural undersupply is particularly acute in well-located inner- and middle-ring suburbs, where owner-occupier demand is strongest.
The economy is solid, employment is high, and GDP growth is accelerating.
These are the conditions that allow property markets to continue growing, but not at the pace we saw during the last few years.
Melbourne in particular remains a market I'm watching closely and positively.
It has been out of favour with many investors over the past two years due to state government land tax changes and some softening in values. But the fundamentals of population growth, economic activity, and supply shortage in quality locations haven't gone away.
Markets that are out of favour and experiencing weak sentiment are often exactly where patient, long-term investors find the best opportunities.
The investors who will look back in ten years and feel pleased with the decisions they made in 2026 won't be the ones who waited for certainty. They'll be the ones who understood the long-term drivers, bought quality assets in the right locations, and stayed the course.
That's the core of what I've believed for fifty years, and nothing in this week's data changes that view.
