New forecasts show that the Australian apartment market is entering a new phase of growth, with construction starts increasing sharply from 2026.
Australia’s apartment sector could be on the cusp of a revival, with new forecasts from the Housing Industry Association (HIA) pointing to a surge in construction from 2026.
According to HIA, apartment occupancy is expected to grow by 6.5% by 2026, accelerating to almost 100,000 new homes per year by the end of the decade.
Construction of just over 61,000 multi-unit housing units began in 2024, but momentum is increasing. With 19,450 apartment starts in the March quarter of 2025, HIA forecasts this to moderate slightly to 17,440 in the June quarter and remain stable for the remainder of the year. That would bring the total to 72,070 – an increase of 17.2% from 2024.
From there, 76,570 are expected to start in 2026, increase to 96,910 in 2028 and close to 100,000 in 2029.
“Population growth remains high, migration is returning to urban areas and prices of established apartments are rising faster than detached homes,” said HIA chief economist Tim Reardon.
“These are the first signs of an emerging apartment cycle, as new developments begin to re-emerge financially.”
Mr Reardon said the recovery would be accompanied by continued strength in the construction and renovation of detached homes.
“This will not be a speculative boom,” he said.
“It is a necessary response to growing population pressure and the rising demand for housing in our major cities.”
When it comes to detached houses, there were 28,620 homes that started construction in the March quarter of 2025, with a similar forecast of 28,240 for the June quarter, rising to 29,470 in the final quarter of 2025.
This will bring the total number of detached homes for the year to 115,070 – an increase of 7.2% on 2024. According to the organisation, the steady improvement is expected to continue, peaking at 125,840 in 2027, before moderating to 116,370 in 2029.
Signs of momentum
The latest forecasts come after construction approvals for multi-home projects rose 26% by September 2025.
Apartments were the standout driver, with approvals up 81.7% in September compared to August in original terms.
According to Mr Reardon, the next construction cycle will depend on further government policies such as NSW’s Pre-Sale Finance Guarantee, which launched in September 2025.
“If state governments recognize that high taxes on apartment builders and financiers have limited supply and address these issues, the recovery could further accelerate,” he said.
“The NSW Government’s recent underwriting program for apartment projects is an encouraging first step.”
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