Total housing construction reaches record high on new apartments

Housing approvals rose to a new record high in January largely off the back of new apartments being built across NSW, official figures show.

The total value of new residential construction rose to $7.9bn. Picture: NewsWire / Sharon Smith

The total value of new homes being built or homeowners making alternations hit a record high in January.

Fresh figures from the Australian Bureau of Statistics show residential building values reached a record high $9.04bn on the back of a $7.9bn spike in building approvals as well as $1.14bn rise in values of alternations and additions.

The total value of new residential construction rose to $7.9bn. Picture: NewsWire / Sharon Smith

ABS head of construction statistics Daniel Rossi said the total number of dwellings approved in January rose 6.3 per cent to 16,579, following a 1.7 increase in December.

“Approvals for private dwellings excluding houses, drove the overall rise, up 12.7 per cent, to the highest level since December 2022,” Mr Rossi said.

A number of large apartment buildings approved in NSW have driven the upward movement over the past two months.

Overall, units are now accounting for 42 per cent of total approvals, up from a low of 35 per cent.

AMP economist My Bui said getting more units in the mix was key to getting dwelling approvals back up to the level last seen in the mid-2010s period.

“Recent uptrend in building approvals is driven by more positive housing sentiment from consumers, as well as better business sentiment within the construction industry, especially with easing material and labour cost inflation,” she said.

Ms Bui said there remained a big gap between building approvals completions versus the target of 240,000 per annum.

The Australian government previously set a 1.2m new house construction target by 2029, meaning 240,000 new homes need to be built each year.

Ms Bui said Australia is sill unlikely to reach its home building target. Picture: NewsWire/ Gaye Gerard

Private sector dwellings excluding houses continued to rise, up 12.7 per cent to 7213 dwellings, following a 17.4 per cent rise in December.

The overall result is 41.6 per cent higher than one year ago.

However, approved non-residential buildings approvals fell sharply, dragging the entire building approval sector for the month down $6.9bn to $14.73bn.

The value of approved non-residential buildings fell 20.7 per cent (to $5.69 billion), after a 19.7 per cent December jump, in seasonally adjusted terms.

Despite the fall, the result is 11.3 per cent higher than January 2024 and follows the second highest ever value in this series in December.