New home building approvals are at their weakest point since June 2024, with a 7.2 per cent reduction during January 2026 according to data out today.
Master Builders Australia chief economist Shane Garrett says the drop was the result of a 21 per cent reduction in higher density home building approvals, which are now 41.5 per cent down on a year ago.
“Australia is depending on higher density housing to reach not only National Housing Accord targets but to dramatically increase housing supply," Garrett says.
“The collapse in higher density approval numbers over recent months is particularly worrying when we are already 77,700 homes behind on the National Housing Accord’s target of 1.2 million homes before the end of the decade."
Master Builders Australia CEO Denita Wawn says this is another disappointing result for the industry, providing further evidence of the need for urgent policy reform.
“This new building approval data follows revelations that the construction industry has suffered a seventh consecutive year of productivity decline, with more labour and materials producing fewer new homes," says Wawn.
“Declining productivity slows down the delivery of everything including new homes and makes those that do get built much more expensive for builders, renters and aspiring home buyers.
“The industry needs holistic tax incentive policies to see an increase, not a decrease, in private investment in housing, as well as further investments in infrastructure and training pathways, as outlined in our Pre-Budget Submission.
“As recommended by the Productivity Commission, having a clear agenda and target for regulatory reform is also critical to supporting a productive, sustainable and profitable building and construction pipeline.
“Boosting productivity, providing the correct investment and incentives and meeting the Housing Accord will mean more homes and more economic prosperity, as well as easing the inflationary pressure that is created by higher housing costs."
