Australia needs more homes. We all know that, don’t we?
And now the latest figures are telling us that building approvals are going up again.
Fantastic! Problem solved, right?
Well, not quite.
Because here’s something I’ve learned after more than two decades in property investment and residential development: getting a project approved is one thing. Actually delivering the finished home is another story altogether.
And I think that’s where we need to focus a little more attention.
More Homes Approved. Sounds Like Good News.
According to the Australian Bureau of Statistics, building approvals increased by 5.1% in September 2026, with 17,948 dwellings approved across Australia.
That’s encouraging.
But here’s where it gets interesting. While total approvals increased, approvals for detached houses actually fell by 5.3%. And compared with September last year, total dwelling approvals were still slightly lower.
So, are we seeing a genuine recovery in housing construction, or simply another monthly fluctuation?
Well, it’s probably too early to draw big conclusions from one month’s figures.
And that’s the problem with looking at headlines alone.
One set of numbers might tell you that housing activity is picking up. Another might suggest things are slowing down.
Both can be true depending on what you’re measuring.
The important thing is understanding what’s really happening behind those numbers.
Because an approval is a good start, but it’s certainly not a finished home.
The Real Work Starts After the Approval
Here’s something I think gets overlooked when people talk about Australia’s housing shortage.
You can approve thousands of homes, but somebody still has to build them.
And that’s where things get interesting.
You’ve got the land to prepare, tradespeople to organise, materials to source, construction to coordinate and services to connect.
And that’s before you start dealing with the unexpected things that can happen along the way.
I’ve seen plenty of projects where everything looks fantastic on paper. The plans are ready, the numbers look good and everybody’s excited.
But once construction gets underway, that’s when the real work begins.
And if the different pieces aren’t properly coordinated, delays and additional costs can quickly change the financial outcome.
Now, to be fair, we’re also seeing some encouraging progress.
According to the ABS, construction commenced on 52,201 homes during the June quarter of 2026, an increase of 7% from the previous quarter.
And 47,168 homes were completed, up 5.8%.
That’s good news. More homes are starting construction, and more are being finished.
But here’s the bigger picture.
Australia has a national target of building 1.2 million homes over five years, ending in June 2029.
According to the National Housing Supply and Affordability Council’s August 2026 report, we’re currently projected to reach that target in late 2030 instead.
So, clearly, we’ve still got some catching up to do.
We don’t just need more building approvals. We need more finished homes.
Why Isn’t It Happening Faster?
Well, one obvious challenge is finding enough skilled people to do the work.
The Housing Industry Association reported in October that Australia needs approximately 83,000 additional skilled tradespeople to meet its housing requirements.
That’s a lot of people.
And when skilled trades are in short supply, it doesn’t just affect how quickly homes can be built. It can also affect what they cost.
The HIA reported that trades prices increased by 6.6% over the year to September 2026.
Now, add higher financing costs, land prices, materials and the normal complexities of construction, and you can see why delivering housing isn’t as simple as announcing another development.
But here’s the thing.
These challenges aren’t reasons to stop building.
They’re reasons to get better at how we plan, organise and deliver projects.
And I think that’s an important distinction.
The Cheapest Price Isn’t Always the Best Deal
Let me give you something to think about.
Imagine you’re comparing two house-and-land packages.
One looks considerably cheaper than the other.
Naturally, you’re interested in the cheaper option. Who wouldn’t be?
But have you checked what’s actually included?
Is the land ready to build on? What about site preparation, drainage, driveways, fencing, landscaping and service connections?
And what happens if the project takes longer than expected?
I’m not saying the cheaper option is necessarily wrong.
I’m saying the advertised price doesn’t always tell you the full story.
A property that appears inexpensive at the beginning can become considerably more expensive once all the costs are considered.
And the same principle applies to larger residential developments.
It’s not just about getting approval or starting construction.
It’s about understanding what it takes to deliver the finished property at a cost that makes sense.
That’s why I’m a big believer in doing the homework before making the commitment.
Because getting the details right at the beginning can save a lot of headaches later.
Does This Mean New Builds Are Too Risky?
Not at all.
Look, I’m all for building more homes. Australia needs them.
And new housing has an important role to play.
Modern homes can offer better energy efficiency, more practical designs and potentially lower maintenance requirements in the early years.
But let’s not confuse a new property with an automatically good investment.
They’re two different things.
The location still matters. The price still matters. Rental demand still matters.
And most importantly, the property needs to make financial sense for the person buying it.
I’ve said it before, and I’ll say it again: there’s no one-size-fits-all property investment strategy.
What works for one investor might be completely unsuitable for another.
Someone looking to build a portfolio over the next twenty years may have different priorities from someone approaching retirement.
And someone with strong cash reserves may be comfortable taking on risks that another household simply cannot afford.
That’s why a good property investment decision starts with understanding your circumstances, not just finding an attractive house.
Are We Building the Right Homes in the Right Places?
Here’s another question I think deserves more attention.
Are we just concentrating on how many homes Australia needs, or are we also thinking carefully about where those homes should be built?
Because there’s no such thing as one Australian property market.
One city performs differently from another. One suburb can have completely different housing needs from the suburb next door.
Some areas may need more family homes. Others might need smaller, more accessible dwellings or housing close to employment and essential services.
And from an investor’s perspective, those differences matter.
Building a beautiful new home doesn’t automatically guarantee strong rental demand.
You still need to understand who’s going to live there, what they can afford and whether the local market actually needs that type of property.
That’s why I always come back to the same principle.
The right property, in the right location, at the right price, for the right investor.
It sounds simple, doesn’t it?
But getting all those pieces right takes work.
So, Can Australia Build Enough Homes?
I think we’re making progress, and the latest construction figures show that.
More homes are getting started. More are being completed. And that’s encouraging.
But we’ve still got some significant challenges to work through, particularly when it comes to skilled labour, construction costs and getting projects delivered efficiently.
And I don’t believe those challenges will disappear simply because another few thousand building approvals are announced.
Somebody still has to turn those approvals into homes.
So whether you’re a homeowner, investor or developer, my advice is pretty straightforward.
Do your research. Understand the numbers. Ask the right questions. And make sure the people involved know what they’re doing.
Because at the end of the day, you’re not buying a building approval or an artist’s impression.
You’re buying a home that needs to be completed, occupied and financially sustainable.
And remember, you gotta be in it to win it.
But make sure you know what you’re getting into.
Now, I’d Like to Hear What You Think.
Australia needs more housing. I think most of us can agree on that.
But what do you believe is the biggest thing holding us back?
Is it the shortage of skilled tradespeople, rising construction costs, expensive land or the time it takes to get projects approved?
And if you’ve recently built a home, what was the biggest challenge you faced?
I’d genuinely like to hear from homeowners, investors, builders and people working in the construction industry.
Sometimes the people on the ground have a very different perspective from what we’re reading in the headlines.
Uwe Jacobs Property Strategist | Property Friends
Disclaimer: This article provides general information and property market commentary only. It does not constitute financial, legal, taxation or credit advice. Construction costs, delivery timeframes and investment outcomes vary according to project circumstances and location. Seek advice from appropriately qualified professionals before making property investment decisions.
