Building approvals declined for a second consecutive month in April, though industry experts argue the figures don’t fully capture the direction of future housing supply.
According to seasonally adjusted data from the Australian Bureau of Statistics (ABS), building approvals fell 3.4% in April to 16,710, following a sharper 10.5% drop in March 2026.
Performance across states was uneven. New South Wales recorded the largest decrease, down 9.5%, followed by Western Australia (-7.4%) and Victoria (-3.9%). In contrast, Tasmania posted a strong increase of 42.2%, while South Australia rose 4.3% and Queensland edged up 0.3%.
ABS head of construction statistics Daniel Rossi said the overall decline was mainly driven by private dwellings excluding houses. “The fall in total dwellings approved was driven by a 3.6% fall in private dwellings excluding houses, after falling 25.7% in March,” he said.
Within that segment, apartment approvals rose 9% to 4,108 dwellings, largely supported by New South Wales. However, approvals for semi-detached dwellings dropped 5.8% to 2,901, pulling the category lower overall. Detached house approvals fell slightly by 1% in April, although they remain at historically elevated levels, Mr. Rossi noted.
“This is the third consecutive month with over 10,000 private sector houses approved,” he said. “The last time this occurred was during the final three months of 2021.”
Despite monthly weakness, approvals remain stronger than a year earlier. Total approvals are up 10.2% year-on-year, with detached houses rising 7% and private sector dwellings excluding houses increasing 20.5%.
REA Group senior economist Anne Flaherty also pointed out that approvals in the early months of 2026 are above last year’s levels. “Comparing the first four months of 2026 with the same period last year, approvals are up 5%, driven by a 9% rise in new house approvals, while dwellings other than houses were down 1%,” she said.
The bigger picture
Economists and industry advocates say April’s figures should not be viewed as a clear signal of the broader housing supply trajectory. Ms. Flaherty said multiple forces are shaping construction activity in 2026.
“Key factors impacting development activity in 2026 are higher interest rates and rising building costs,” she said. “Greater incentives for investors to buy new rather than established properties could drive more demand to the new homes sector and support supply.”
Property Council group policy and advocacy executive Matthew Kandelaars noted that approvals are only one part of the equation, with feasibility and delivery ultimately determining housing output.
“Across April we continued to see rising cost pressures, global volatility, and increasing speculation and uncertainty in the lead-up to the Federal Budget, all of which influence how projects stack up,” he said. “Softer approvals reflect a more cautious investment environment, higher costs, and greater uncertainty.”
Housing Industry Association (HIA) senior economist Tom Devitt said recent developments—including international conflict, budget measures, and rising interest rates—are likely to influence approvals in the second half of the year. “These issues magnify the importance of the role of governments to reduce the cost of delivering a new home to market,” he said.
The 2026 federal budget introduced several measures aimed at supporting housing supply, including adjustments to negative gearing and the capital gains tax discount, along with a $2 billion Local Infrastructure Fund.
This fund is intended to finance infrastructure such as roads, water, power, and sewerage, supporting the construction of up to 65,000 homes over the next decade. Despite supply-side pressures, demand remains strong. The HIA’s latest New Home Sales report showed a 4.9% rise in sales in April.
“Australia is not expected to build enough homes to meet current and future demands,” Mr. Devitt said. “Taxes and regulations on home building need to be reduced and skills shortages addressed if Australia is to meet its housing targets. “Budget measures to deliver ‘enabling’ infrastructure like transport and utilities will support home building over the medium- to long-term.”
