Key takeaways
In October, dwelling approvals hit a 22-month high, with 15,500 approvals nationwide, a 4.2% increase from the previous month.
This rise was driven by a 24.8% spike in apartment approvals, particularly in New South Wales.
The government aims to deliver 1.2 million new dwellings over five years, but achieving this goal will be virtually impossible given current building approval trends.
Many approved apartment projects are unlikely to start construction without sufficient pre-sales and financing, delaying their contribution to the housing supply for 3–4 years.
Retail turnover rose 0.6% for the month, marking a 3.4% annual increase, driven by early holiday shopping and strong non-food sales, such as cosmetics and recreational goods.
Auction clearance rates remain slightly lower than the same period last year (61.5%) but are holding steady as the auction season concludes.
Are we making progress, or is the housing crisis set to deepen?
That’s what I discussed in this week’s Property Insiders chat with Dr. Andrew Wilson.
While the government has set an ambitious goal to deliver 1.2 million new dwellings over the next five years, the latest building approval figures paint a complex picture of whether this target is achievable.
Watch this week’s Property Insider chat as we analyse the current data, explores what it means for future housing supply, and discusses whether these approvals align with demand.
With rental markets tightening, migration surging, and construction costs still high, we’ll look at the critical roadblocks and whether the government’s housing plans are on track—or just wishful thinking.
Dwelling approvals hit 22-month high
Watch this week’s Property Insider chat as Dr Andrew Wilson analyses the latest home building approvals data.
There were 15,500 dwellings approved for construction nationally in the month of October, the highest number of approvals in almost two years.
Total dwelling approvals have risen by 4.2 per cent compared to the previous month, but this was mainly because of the more volatile apartment approvals being up 24.8%.
This occurred because the number of large apartment dwellings was approved in New South Wales; however, just because apartment complexes obtain building approval doesn’t mean they come out of the ground -this requires pre-sales and finance.
And even if these towers were to be built, they wouldn’t be completed for 3 to 4 years, meaning we will have a housing shortage for some time.
Overall, annual building approval levels remain depressed, especially apartments as you can see from the following chart.
It’s great to see building approvals tick up in October, but let’s not get too carried away—this doesn’t mean we’re solving the housing crisis.
While approvals might be a step in the right direction, they’re just one piece of the puzzle.
Australia’s population is growing faster than it has in years, with record immigration and natural growth putting enormous pressure on the housing market.
Unfortunately, the number of homes we’re actually building isn’t keeping up.
As I said, the problem is that approvals don’t always translate into completed homes.
Many projects face hurdles like rising construction costs, labor shortages, and stricter lending conditions for developers.
Even when homes are built, they’re often in the form of high-density apartments, which aren’t always what families or larger households need.
So, while we’re seeing some movement, it’s not nearly enough to keep up with demand—or to address the preferences of Australian buyers and renters.
Without significant policy interventions and industry reform, the gap between the homes Australians need and the homes actually being built will continue to widen.
- Also read:Housing Crisis Alert: What Latest Building Approval Figures Mean for Investors | Property Insiders
- Also read:This week’s Australian Property Market Update – Latest Data, State by State December 10th 2024
- Also read:Auction Report Dec 7th 2024 | Auctions Numbers Lower but Clearance Rates Generally Steady to Begin December
- Also read:Everything you need to know about the state of Australia’s property markets in 20 charts – December 2024
- Also read:Latest Asking Prices State by State | Total property listings rise 7.6%
Structural issues like restrictive zoning laws, limited access to land, and inadequate government incentives for small-to-medium developers must be addressed to enable meaningful progress.
Otherwise, the already strained rental market will worsen, affordability will further erode, and the dream of homeownership will become even more elusive for many Australians.
It has been more than a year since the RBA last raised interest rates, and the unchanged interest rate settings have provided some degree of certainty for consumers with more Australians committing to building new homes, despite there being no cut to the cash rate.
This is partly because unemployment remains very low and people have job security at a time when housing demand remains very strong.
The following chart shows how building approvals have surged over the last year in Perth and Brisbane, and there is no surprise here as they have been the strongest-performing housing markets over the last year.
Australians beat the rush: October retail sales show strong growth
Watch this week’s Property Insider chat as Dr Andrew Wilson explains how Australian retail turnover rose by 0.6% in October, marking the third consecutive month of growth and bringing annual sales to $36.7 billion—a 3.4% increase compared to the same period last year.
This uptick was largely driven by early discounting ahead of Black Friday, with retailers enticing consumers to make purchases earlier than usual.
Significant contributions came from non-food industries, particularly 'other retailing'—which includes cosmetics, sports, and recreational goods—seeing an 8.4% year-on-year rise to $5.85 billion.
Household goods also experienced a 3.3% increase, reaching $5.92 billion.
However, not all sectors shared in the growth; clothing, footwear, and personal accessory retailing fell by 0.6%, a decline of $18.1 million, primarily due to reduced spending on clothing and footwear.
This pattern suggests a shift in consumer behaviour, with many Australians starting their holiday shopping earlier to manage budgets amid cost-of-living pressures.
Overall, the October retail figures reflect a cautiously optimistic consumer sentiment, with discretionary spending showing signs of recovery, likely influenced by factors such as tax cuts and a slowdown in inflation.
Let’s see what happens to retail sales in November with all the Black Friday “bargains.”
Auctions numbers are lower, but clearance rates generally steady to begin December
The December auction market has commenced with more generally steady clearance rates as listings predictably fell over the penultimate auction week of the year.
The national weekend auction market reported a clearance rate of 60.1% over the past week which was higher than the 58.2% reported over the previous week – but just below the 61.5% recorded over the corresponding weekend last year.
Clearance rates have continued to reflect generally positive results for most sellers as the auction season winds down with only one week left until the lengthy holiday break.
