Dispute over housing targets amid more dire approvals figures

New housing approval numbers have again shown that the nation is falling further behind in the quest to build 1.2 million homes by mid-2029.

The Australian Bureau of Statistics data for April 2025 shows the total number of dwellings approved for construction was the lowest volume since August last year, with a particularly big fall-off in approvals of higher-density dwellings like apartments.

The new figures come as a leading Melbourne developer has questioned the veracity of projections that show Victoria will be the only state to come anywhere near meeting its share of the National Housing Accord target.

The details 

The ABS says the total number of dwellings approved for construction in April 2025 fell 5.7% on the previous month’s figures to just 14,633 in seasonally adjusted terms.

While approvals for freestanding houses rose 3.1%, to 9,349, the category the ABS calls “private sector dwellings excluding houses” fell 19.0%, to 4,999.

This is the category that includes apartment and townhouse developments - exactly the type of high-density housing the Federal and state governments say they want to see more of as part of the National Housing Accord targets. 

The value of total residential buildings also fell 1.3%, to $8.91 billion.

In order to achieve the Federal government’s ambitious target of building 1.2 million new homes over the five years between July 2024 and the end of June 2029, Australia needs to be building on average at least 20,000 new homes every month. 

As independent housing economist Cameron Kusher points out, “in reality, not everything will be completed so you need to approve more than 20,000 a month and as time progresses, other dwellings being approved won’t be completed before the June 2029 target.”

Nevertheless, Mr Kusher says if you assume a figure of 20,000 approvals a month, “between July 2024 and April 2025 we should have approved at a minimum 200,000 new dwellings for construction but we’ve only approved 154,289, a gap of 45,711 and up from a gap of 40,344 in Mar 25.”

This graph by Cameron Kusher, based on ABS data, shows how the continuing national dwelling approvals shortfall is getting worse over time, not better:

Mr Kusher has also examined how individual states are performing, based on the Housing Accord supply targets for each state.

These were clearly set out in the recent State of the Housing System Report for 2025 from the National Housing Supply and Affordability Council, an advisory body set up by the Federal government.

His graphs show how the cumulative target shortfall is blowing out badly in New South Wales, pointing to a worsening of the existing large undersupply of homes in Australia’s most populous state.

In contrast, Victoria is staying at or near its dwelling approvals target, and appears largely on track to meet, or at least come close to its Housing Accord target.

The State of the Housing System Report forecast that Victoria would actually achieve 98% of its National Housing Accord Target of 306,000 new homes by mid-2029, the only state that would come anywhere near meeting its goal. 

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Hang on…

There’s no doubt that at face value, Victoria seems to build new housing more quickly and efficiently than most other Australian states and territories, with the notable exceptions of Queensland and the Northern Territory.

However, as in other states, that timeframe has blown out substantially over the last decade, from a low of 8.34 months in 2015-16 to 11.31 months in 2023-24.

It’s also worth noting that many industry observers think Victoria’s nominal Housing Accord targets are a gross underestimation of the number of homes that will be needed to house residents of the high-growth southern state, which is already experiencing a severe housing shortfall.

Chief among these is Melbourne developer Maxwell Shifman, a Past President of the Urban Development Institute of Australia.

“One needs to understand the way the Accord targets were formulated,” he says.

“They are based on the proportion of the Australian population in each state as at December 2022, and are not linked to need, or expected population growth.

“As a result, Victoria looks better than it should because it was allocated the second-highest growth target, even though it has higher forecast population growth than New South Wales,” Mr Shifman says. 

The developer points out that the Federal Treasury’s Centre for Population predicts Victoria will grow by 1.216m people by 2024-25 compared to 1.118m in New South Wales. 

“Yet NSW was given a target of 376,000 (homes),” he says.

“It's the same reason Victoria looks strong on overall housing approvals and commencements, but drops to fourth place when adjusted for growth.” 

Looking at the trend in recent housing commencement data, Maxwell Shifman also predicts that Victoria will fall more than 30,000 new homes short of its allocated Housing Accord target. 

If Mr Shifman is right, investors who bypass Victoria because they think the state’s residential housing market won’t continue to be grossly undersupplied for many years to come are making a grave mistake.