INDUSTRY NEWSNationalReal Estate News

Detached house approvals increase as multi-unit approvals decline

Detached house approvals have risen by 0.6 per cent in July 2025, while multi-unit approvals experienced a significant drop, highlighting ongoing challenges in meeting Australia's housing targets.

According to the Australian Bureau of Statistics’ monthly building approvals data, the increase in detached house approvals was widespread across most states and territories, with Western Australia leading the growth at 3.6 per cent, followed by New South Wales at 3.2 per cent and Victoria at 1.7 per cent.

The total volume of detached house approvals over the past 12 months has increased by 5.3 per cent to 112,760, showing a positive trend in this segment of the housing market.

HIA Senior Economist Maurice Tapang said this growth came down to several factors. 

“Strong population growth, tight labour markets and recovering household incomes helped improve confidence in an increasing number of markets over the last 18 months,” Mr Tapang said.

The recent announcement of a 5 per cent deposit guarantee scheme is expected to further boost construction activity, particularly among first-time homebuyers who represent approximately one-third of new home purchasers.

Despite the positive movement in detached housing, multi-unit approvals decreased by 18.8 per cent in July, remaining volatile and at very low levels. 

This significant drop contributed to an overall decline of 8.2 per cent in total home approvals for the month, bringing the figure to 15,769 dwellings.

Private sector dwellings excluding houses fell 22.3 per cent to 5,943 dwellings, following a 33.5 per cent rise in June, which had been the highest result since December 2022.

Property Council Group Executive Policy and Advocacy Matthew Kandelaars said he was concerned about the latest figures. 

“The National Housing Accord has energised states and territories across the country to address planning and zoning reforms, exactly as was intended,” Mr Kandelaars said.

He said that despite some progress, the housing supply pipeline remains constrained. 

“Progress is being made, but the supply pipeline remains constrained, as these numbers show,” he said.

Australia needs to approve over 20,000 homes each month to reach the target of 1.2 million new homes by 2029, a goal that appears challenging given current approval rates.

The recent interest rate cuts are expected to encourage more households to enter the housing market. 

With three rate reductions already implemented this year, demand for housing is anticipated to increase further.

Industry experts point to multiple factors hampering housing delivery, including elevated construction costs, labour shortages, complex approval processes, and state taxes. 

The apartment sector faces additional challenges related to overseas financing and development costs.

Mr Kandelaars called for broader recognition of various housing types in meeting supply targets. 

“We must also ensure all housing types are counted towards our 1.2 million new homes target. This means every form of housing – student accommodation, land lease and retirement living – is in supply targets,” he said.

“Without recognition, states have little incentive to zone for and deliver innovative, high-density housing, despite the fact that these options provide essential new homes and free up thousands more for Australians at all stages of life.”

Show More

Rowan Crosby

Rowan Crosby is a senior journalist at Elite Agent specialising in finance and real estate.