Residential construction activity is showing signs of improvement, with a notable increase in the number of new projects commencing. This uptick suggests growing confidence among developers, although challenges remain in translating commencements into completed housing stock.
Figures from the Australian Bureau of Statistics reveal that 52,283 new dwellings commenced construction in the December 2025 quarter. This represents an 18.5% increase compared to the same period in 2024, indicating a significant rebound in building activity.
New South Wales led the way, with construction starting on 16,272 dwellings during the quarter. It was followed by Victoria, Queensland, Western Australia, and South Australia, reflecting a broadly distributed increase in activity across the country.
Despite this positive momentum, the number of completed dwellings tells a more concerning story. A total of 43,598 homes were completed during the same quarter, which is 1.8% lower than in December 2024. This shortfall highlights ongoing constraints within the construction sector, including labour shortages, rising costs, and project delays.
The gap between commencements and completions has significant implications for housing supply. Current completion levels leave the country approximately 77,500 homes short of the targets set under the National Housing Accord, underscoring the scale of the challenge.
According to Property Council of Australia executive director Matthew Kandelaars, approvals data often paints an overly optimistic picture of housing delivery. He emphasises that commencements and completions provide a more accurate reflection of what is actually being delivered to the market.
The key issue is that while more projects are starting, fewer are being finished. Without a corresponding increase in completions, the supply gap will persist, limiting the impact of higher construction activity on overall housing availability.
Addressing this imbalance will require a coordinated approach, including improving productivity within the construction sector, reducing regulatory delays, and ensuring a stable pipeline of projects. Only then can increased building activity translate into meaningful gains in housing supply.
