Aussie apartment slump triggers 15% drop in building approvals

The Australian construction sector faced a sharp downturn at the end of the year, with total dwelling approvals falling 14.9% to 15,542 in December 2025, according to the latest seasonally adjusted data from the Australian Bureau of Statistics.

The decline was primarily fueled by a 29.8% collapse in the high-density sector—private dwellings excluding houses—effectively erasing the gains from a similar 29.6% surge recorded in November 2025.

Daniel Rossi, ABS head of construction statistics, noted that while the monthly drop was substantial, it followed a period of uncharacteristically high activity in the apartment sector, which hit a five-year peak just one month prior.

Victoria bore the brunt of this volatility, with apartment approvals cratering from 1,496 in November 2025 to just 339 in December 2025.

In contrast, the detached housing market remained resilient, as private sector house approvals edged up 0.4% to 9,487 dwellings.

Performance varied significantly by state; South Australia led the pack with a 13.1% increase, reaching its highest level since April 2023, while New South Wales experienced a 5.5% decline.

The broader economic impact was felt in the value of total building approvals, which slid 12.3% to $16.32 billion.

Residential building values drove this contraction, falling 16.0% from the previous month’s record high, while non-residential building values saw a more moderate decline of 6.4%.

Despite the monthly turbulence, private house approvals remain 5.7% higher than they were a year ago, signaling a steady, if cautious, appetite for new detached homes.