Australia’s building sector is showing signs of recovery, with new ABS data confirming a strong uptick in dwelling commencements during the March 2025 quarter.
However, Master Builders Australia has warned that more must be done to meet the ambitious goals set under the National Housing Accord.
According to the Australian Bureau of Statistics, total dwelling commencements rose by 11.7 per cent compared to the December quarter, and were up 17.3 per cent on the same period last year. The March figures saw 47,645 new dwellings commenced, the highest quarterly total since June 2022.
“This rebound was led by a sharp lift in higher density home building,” said Master Builders Australia CEO Denita Wawn.
“Higher density starts rose by 20.9 per cent over the quarter and were 29.1 per cent higher than a year ago. The 19,142 starts is the highest quarterly figure for this segment since December 2021. Detached housing also saw growth, albeit modestly.”
Despite the improvement, Ms Wawn cautioned that the pace of building activity still falls short of what’s required to hit the National Housing Accord’s target of 1.2 million new homes by 2029.
“Since the commencement of the Housing Accord, just 134,466 new dwellings have commenced. To stay on track, we would need around 60,000 starts per quarter – we are about 25 per cent short of that pace,” she said.
Other parts of the sector showed mixed results. Home renovations edged up 1.1 per cent for the quarter and were 5.5 per cent higher than a year earlier, “broadly in line with recent trends,” according to Ms Wawn.
Meanwhile, work on non-residential buildings slipped slightly, down 0.6 per cent in the quarter and 4.1 per cent over the year. This marks a smaller decline than the previous quarter, which recorded a 2.9 per cent fall.
“While there is room for optimism that the worst is now behind us, the government and industry need to play catch-up if we’re going to meet the 1.2 million new homes target under the National Housing Accord,” Ms Wawn said.
Master Builders is pushing for policy reform focused on lifting productivity across the construction industry, which it says is a key constraint on progress.
“Productivity in the building and construction industry has fallen 18 per cent over the last decade, even as housing costs have surged by over 40 per cent,” she said.
“Boosting productivity is essential to building a better, safer and fairer industry. It helps deliver quality outcomes, improves safety standards and keeps costs down.”
