Houses Are Booming, Apartments Are Not. Here Is What That Means For You

New figures from the Australian Bureau of Statistics show two very different stories playing out in new home building at the same time. Private house approvals just hit their highest monthly total in five years. Approvals for townhouses and apartments, on the other hand, fell sharply. If you are planning to buy, build, or invest in the next year or two, this split is worth understanding, because it says something about where supply is heading, and where it is not.

What the numbers actually show

The ABS released its Building Approvals data for August 2026 on 30 September. Total dwelling approvals across the country fell 6.1 per cent to 16,953. That headline drop hides the real story though. Private sector house approvals rose 3.7 per cent to 10,885, the highest monthly figure since August 2021, and the eighth month in a row above 10,000. Approvals for townhouses and apartments fell 21.2 per cent to 5,674.

The state picture was patchy too. South Australia, Victoria and Western Australia all recorded rises in total approvals, while Queensland, New South Wales and Tasmania recorded falls. Queensland's drop was the steepest, down 22.5 per cent, with New South Wales down 17.3 per cent.

Why apartments are the ones falling away

Apartment and townhouse approvals tend to move around a lot month to month, because a single large project being approved, or held up, can swing an entire state's total. That is part of what happened in August. But the broader trend has been weak for a while, and it lines up with what developers and builders have been saying for over a year: construction costs, financing conditions and planning timelines make medium and high density projects harder to get over the line than standalone houses right now.

House and land packages are simpler to finance and build than apartment towers, and the current conditions seem to be nudging developers and buyers toward that simpler option. For someone planning to build, that is useful context. For someone hoping a wave of new apartments will ease rental pressure or soften unit prices in their area over the next couple of years, it is a reason for caution rather than confidence.

The bigger supply picture

This data lands alongside a broader question the federal government and the states have been grappling with: whether Australia is on track to build 1.2 million new homes by mid-2029 under the National Housing Accord. The National Housing Supply and Affordability Council's most recent quarterly report, released in August, found the country is now running about a quarter behind that original schedule, with the target more likely to be reached around the December quarter of 2030.

The Council's report points to construction costs as a central reason why. House construction costs rose 2 per cent in the June quarter of 2026 alone, and are now around 51 per cent higher than before the pandemic. About 308,000 new homes have been completed since the Accord began, roughly a quarter of the target, while building approvals overall are up 26 per cent and commencements up 15 per cent since the Accord started. Progress is real. It is just slower than planned, and the apartment side of the ledger is where most of that slowness is showing up.

What this means if you are buying, building or investing

If you are a first home buyer or upgrader weighing established versus new, this is one more data point suggesting new unit supply in many areas will stay tighter for longer than the Accord originally assumed. That does not mean prices only move in one direction, plenty of other forces are at play, but it is worth factoring into how you think about timing and location.

If you are planning to build a house rather than buy an apartment off the plan, you are in good company this year, and construction lending demand for house and land is likely to stay solid. If an apartment is more your plan, whether to live in or invest in, it is worth asking your builder or developer directly about financing status and construction timelines before you commit, rather than assuming approval means the project is fully funded and ready to go.

Either way, how much you can actually borrow still comes down to the usual factors: your income, expenses, existing debts and the rate buffer lenders are required to test you against, which remains 3 percentage points above the loan rate under APRA's current rules. If you want a clear read on your borrowing power before you start looking, that is exactly the kind of conversation a broker can help with.

Figures note: building approvals data is from the Australian Bureau of Statistics, Building Approvals, Australia, August 2026, released 30 September 2026. National Housing Accord progress figures are from the National Housing Supply and Affordability Council's Quarterly Report, released 21 August 2026. The APRA mortgage serviceability buffer of 3 percentage points was current as of early October 2026.

This article is general information only and does not take into account your personal objectives, financial situation or needs. Please speak with a Claremont Financial broker before making any borrowing decision.