Trends in Residential Approvals: What the Latest ABS Data Reveals

The latest data from the Australian Bureau of Statistics (ABS) reveals a dramatic swing in residential building approvals across New South Wales (NSW), underlining both the potential and volatility of the state’s housing pipeline.

January Surge Signals Apartment-Led Growth

In January 2025, NSW recorded 6,047 residential building approvals - a staggering 39.6% increase from the previous month.

The bulk of this surge was driven by approvals for large apartment complexes, with the ABS noting a nationwide 12.7% rise in private sector dwellings excluding houses.

NSW was the standout contributor to this trend, reinforcing its pivotal role in delivering higher-density housing.

This increase reflects renewed confidence among developers, likely in response to recent state initiatives such as the Housing Delivery Authority and the Transport-Oriented Development Program.

These policies aim to unlock medium- and high-density housing near transit hubs and town centres, helping to ease the pressure on urban sprawl and meet ambitious housing targets.

February Downturn Exposes Ongoing Volatility

Despite the strong start to the year, momentum quickly faltered.

February 2025 saw a sharp 44% decline, with approvals falling to just 3,390.

This number is less than half the monthly average needed for NSW to meet its National Housing Accord target of 75,000 approvals per year.

The rollercoaster data highlights the unstable environment developers face.

Approvals continue to be hindered by slow council assessment times, construction cost inflation, and labour shortages.

According to the Property Council, the average DA assessment time across Greater Sydney is now 173 days, with fewer than 25% of councils meeting their targets.

Why the Apartment Sector Matters

Higher-density developments are central to NSW’s long-term housing supply. However, they are also subject to the most significant delays.

Apartments currently take an average of 2.5 years from approval to completion. The compounded effect of delays in planning, approval and construction is holding back new housing from entering the market when it’s most needed.

Adding to the challenge is the growing disparity between housing types. While apartment approvals soared in January, approvals for detached houses declined by 0.8% in NSW, contrasting with growth trends in South Australia and Western Australia.

Planning Reform and Government Action Needed

Industry leaders are calling for urgent reforms to streamline development approvals. This includes better resourcing for local councils, clearer benchmarks, and improved accountability.

Without such action, NSW risks falling even further behind its housing delivery targets.

As the pressure mounts, the need for agile, expert planning support becomes clear.

Navigating complex DA and CDC processes, especially for medium- and high-density housing, requires experienced town planners who can pre-empt and overcome regulatory bottlenecks.

If you're a developer, investor or architect seeking faster, smarter planning pathways in NSW, our team can help you respond to these market trends and seize the current opportunities before they shift again.

Contact us today for a consultation.