The housing sector is supporting further planning reforms in light of the latest construction data

The latest data on building permits has been described as “frustrating”.

A drop in approvals in October has prompted industry groups to call for changes they say could streamline the approval process and boost housing supply.

Seasonally adjusted data from the Australian Bureau of Statistics (ABS) shows total housing approvals fell 6.4% in October to 15,832 for the month.

The decline was largely driven by a 13.1% decline in approvals for multi-dwelling structures – including apartments, townhouses and semi-detached houses – to 6,253 units. This followed a record month in September 2025, when the category rose 26%.

Private sector housing approvals also fell 2.1% to 9,251 homes in October, after rising 3.2% in September.

Across Australia the picture was mixed.

Victoria, New South Wales and Tasmania recorded significant drops in overall approval of 24.7%, 20.6% and 15% respectively, while Western Australia, South Australia and Queensland saw increases of 28.1%, 11.2% and 2.4%.

ABS head of construction statistics Daniel Rossi said approvals for detached houses have fallen in most states.

“Private sector housing approvals have fallen in most states, with Victoria seeing the biggest decline, down 6.6%, after a 4.7% increase in September,” Rossi said.

“The exception was Queensland, where private sector home approvals rose 2.7%.”

A volatile market

Although the multi-dwelling category was the main driver of the decline in October, it was apartments that suffered the biggest decline, falling by 39.2% to 3,397 units in original terms.

According to the ABS, this figure is 12.8% below the monthly average of the past year.

Property Council of Australia policy and advocacy director Matthew Kandelaars said apartment approvals were inherently more volatile, but the sudden turnaround after September’s surge was “frustrating”.

“We know we can increase our run rate. In October 2015 we approved 9,212 apartments – that should be the benchmark we have set for ourselves,” said Mr Kandelaars.

“While ambitious, this is an achievable goal, and it should be our goal heading into the new year.”

The total number of home approvals fell by 6.4% to 15,832 in October. Photo: Getty

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Mr Kandelaars said recent policy changes, such as new environmental laws, have shown how reforms can speed up approvals.

“This highlights the results that can come from a targeted approach to environmental and planning approvals and is a solid example of how we can make our processes more efficient,” he said.

“But today’s data shows that complex and rigid planning systems continue to hold us back. We need wholesale reforms and an unerring focus on structural improvements to approval processes.”

Denita Wawn, CEO of Master Builders Australia, said the figures showed a “clear gap between policy ambition and reality”.

“Builders are struggling to make the numbers work. Construction costs have risen more than 40 percent since 2019 and rising financing and insurance costs are pushing too many projects off the table,” Wawn said.

“Without urgent action to relieve pressure and restore confidence, more projects will stall before they even start.”

Despite the fall in October, the Housing Industry Association (HIA) analysis shows that the number of new approvals in the 12 months to October 2025 was 192,100 – an increase of 12.6% on the previous year.

“Interest rate cuts have provided a confidence boost to homebuying activity, with households increasingly turning to building new homes as an alternative,” said HIA senior economist Maurice Tapang.

“This is because established home prices continue to rise as demand exceeds the supply of homes available for purchase.”

HIA also predicts a rise in apartment construction, with housing starts expected to grow by 6.5% by 2026, potentially reaching 100,000 new homes per year by the end of the decade.

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