Building approvals may be up but the number of homes actually making it through to completion is at decade low, according to the Housing Industry Association.

The HIA says the past two years have been Australia’s weakest in the past decade in terms of homes being actually built. HIA Chief Economist, Tim Reardon, says skills shortages are persisting on the back of labour demands from other construction sectors and the wider economy.

“The shortage of skilled trades across Australia persists in every capital city and region,” he says. “Commencements will remain well below those necessary to achieve 1.2 million homes over five years.” Building approvals rose by 20.8% in the first quarter of 2025 compared with 12 months earlier, with 48,620 new homes approved for construction. Multi-unit approvals surged by 52.6% in the past year, from what Reardon describes as very low levels.

South Australia had the highest growth in building approvals of 49.4%, Western Australia, New South Wales and Victoria all increased by more than 20% while Queensland was up only 0.8% and Tasmania dropped by 12.9%.