Dwelling approvals fell 9.4% in Q2 2025 to a total of 12,601, signalling a soft start to the year and unwinding much of the momentum seen in late 2024. Compared to a year ago, total approval volumes were unchanged, highlighting ongoing developer caution.

Persistent headwinds, including elevated construction costs and challenging presale hurdles, continue to hamper project feasibility.

Detached houses & townhomes post modest gains 

Amid the overall slowdown, detached houses and townhomes were the only dwelling types to record growth in Q2:

  • Detached houses: approvals rose to 8,123. A 9.1% quarterly increase and a 5.5% yearly increase.
  • Townhomes: approvals rose to 2,576. A 9.1% quarterly increase and a 19.2% yearly increase.

However, these gains were more than offset by a significant fall in apartment approvals.

Apartment approvals fall sharply

Apartment approvals dropped 53.6% in Q2 2025, down to just 1,902 dwellings. This segment remains highly volatile, with the latest figure contrasting sharply with the 38% increase recorded this time last year. The scale and timing of apartment projects often lead to large quarterly shifts

Commencements rise despite falling approvals 

Interestingly, dwelling commencements rose 17.4% in Q1 2025, even as approvals softened. This shift reflects improving developer confidence, particularly in the boutique development space, as construction costs stabilise.

While still elevated, costs have eased compared to the steep rises experienced over recent years. With more predictable cost trajectories, some developers are moving ahead with projects that had previously been on hold.

That said, commencements remain 6% below the decade average, with detached house commencements sitting 6.8% below the longer-term trend.

Completion volumes drop

There were 11,879 completions recorded in Q1 2025, down 23.1% from Q4 2024 and 28.9% lower year on year.

While this decline is significant, quarterly completion data often fluctuates due to project timing and delivery schedules.

This article references findings from our Q2 2025 Economic and Residential Market Report. Read the full report here.