Apartment supply suffers as NSW building approvals hit 12-year low

The recently released building approval data from the Australian Bureau of Statistics shows new home building in New South Wales to be at its lowest level in 12 years.

You'd have to go back to 2012 when New South Wales saw lower approvals that 2024. Just 42,800 homes were approved in 2024, five per cent below 2023, and 42 per cent lower than the calendar year peak of over 73,000 approvals in 2016.

“Building approvals remain our best indicator of future supply. With the disappointment of 2024 still top of mind, it is time that Government looks to 2025 and beyond to get NSW back on track to achieve our state's share of the National Housing Accord targets,” said Stuart Ayres, CEO, UDIA NSW.

The differences between the highs of 2016 and lows of 2024 can be seen across all housing typologies, but are most pronounced in the apartment market where new approvals sit more than 22,000 lower than in 2016.

“The sharp declines in apartment approvals reinforce UDIA’s ongoing messaging that the combination of weak feasibility and slow planning reform has led to a failure to implement the immediate step change that was desperately needed in infill development to achieve the Accord target of 75,000 new homes a year,” Ayres said.

The detached housing market has also fared poorly, with approvals falling below 22,000 in the 12 months to December 2024, for the first time since January 2014.

The development industry continues to wait for details on the Low and Mid-Rise Reform, and first tranche of EOIs from the Housing Delivery Authority. UDIA says the Government also needs to remain focused on supporting the more feasible greenfield market.

“Without a pivot back to feasible greenfield development with a diversity of housing typologies, NSW will keep falling further behind its housing targets,” Ayres added.

“These poor building approvals reinforce the desperate need for reform of the Planning Act and urgency in implementing the Low and Mid-Rise reforms."