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Approvals Are Up. Houses Aren't. What September's Numbers Tell Developers

September approvals rose 5.1% on an apartment rebound, but house approvals fell in every state. A developer's read of what the ABS data means.

Centurion Global··4 min read

Photo: Kgbo / Wikimedia Commons, CC BY-SA 4.0

The Australian Bureau of Statistics released its September building approvals on Monday 2 November. The headline was positive: total dwelling approvals rose 5.1% to 17,948 in seasonally adjusted terms, after a 5.2% fall in August.

The detail is more useful than the headline, and it points in two directions at once.

Houses fell everywhere, apartments bounced

Private sector house approvals fell 5.3% to 10,432. ABS head of construction statistics Daniel Rossi said, "The September fall in private sector house approvals is the largest since August 2025." The fall was national. House approvals dropped in South Australia (7.8%), Victoria (6.0%), New South Wales (5.5%), Queensland (5.1%) and Western Australia (4.6%).

Higher-density housing did the lifting. Private sector dwellings excluding houses (townhouses, terraces, semis and apartments) rose 16.6% to 6,579. In original terms, apartment approvals rose 25.6% to 4,129, just above their 12-month average of 4,106. Townhouse approvals climbed 8.3% to 2,792 after a 19.4% fall in August.

But one month doesn't make a recovery. That higher-density category is still 20.5% below September 2025, and total approvals were 0.8% lower than a year earlier.

The trend is steadier than the month

Monthly approvals data is noisy. The trend series smooths that out, and it tells a calmer story. Trend total approvals rose 1.3% to 18,705 and were 10.6% higher than a year earlier. Trend house approvals edged up 0.1% to 10,687.

Houses have held up better over the year than the September number suggests. Seasonally adjusted house approvals are still 9.6% above September 2025, and Australian Broker notes September was the ninth straight month with more than 10,000 private sector houses approved nationally.

NSW is moving, but the gap is still wide

New South Wales led the month. Total approvals rose 37.3% to 5,322, and apartment approvals more than doubled, from 901 in August to 1,995. Property Council NSW executive director Katie Stevenson put it in context: the state needs around 7,900 approvals a month to meet its National Housing Accord target. "September's 5,322 approvals are a significant improvement, but they also show the scale of the task still ahead," she said.

Elsewhere, total approvals rose 28.0% in Queensland and fell 28.9% in Victoria.

Why approvals aren't the same as supply

Industry voices were cautious. HIA senior economist Tom Devitt said, "Past momentum in the market from early 2025 to early 2026 is likely to sustain approvals at current levels until the end of the year." He added that leading indicators such as new home sales "have already started to reflect the impact of rising interest rates, surging fuel costs and cost of living pressures, and increasing taxes and restrictions on investors."

Oxford Economics Australia's Maree Milroy said forward orders still point to a healthy year for residential commencements, but that "a series of headwinds flagged over 2026 are compounding to drive a materially weaker medium-term outlook for residential construction." She said the firm's preliminary modelling in April estimated a 2–3% total impact on construction costs from disrupted oil markets, on top of ordinary price adjustments.

Urban Taskforce chief executive Tom Forrest gave the bluntest version: "As the cliché goes, you can't live in a planning approval. If it is not feasible to build the new homes, the approvals will not result in the new housing we need."

A developer's checklist for reading approvals

An approval is a permit to start, not a start. Before treating a permit, yours or a competitor's, as real supply, it's worth working through four questions.

  1. Does the cost plan still hold? Re-price the build against current trade and material quotes. Cost risk from fuel and inputs hasn't gone away.
  2. Is there buyer depth at the price you need? New home sales are a leading indicator, and HIA says they're already softening. Test your price point against recent local settlements, not asking prices.
  3. How long from approval to start? Every month between permit and construction start adds holding cost and exposes the project to further cost and rate moves.
  4. Which product is actually moving? September showed townhouses and apartments bouncing while houses fell. Look at your local market, not just the national mix.

One strong month for apartments in NSW is welcome. But what matters is how many of those approvals turn into homes people can buy. That depends on feasibility, and feasibility is decided project by project.

Sources

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