Australia’s long-stagnant apartment construction sector is showing early signs of turning around, with new forecasts from the Housing Industry Association (HIA) pointing to a meaningful recovery in multi-unit commencements from 2026.
HIA Chief Economist Tim Reardon said elevated population growth, renewed migration into major cities and rising established home prices were combining to create the conditions for the next major building cycle.
He noted that apartment prices were now increasing faster than detached home prices, a key indicator that new developments were becoming financially viable again.
Just over 61,000 multi-unit dwellings were started in 2024 – roughly half the level seen in 2016 and well short of what’s required to meet national housing targets.
The HIA expects activity to lift by 6.5 per cent in 2026 and to continue strengthening throughout the decade, reaching close to 100,000 commencements by 2030.
Mr Reardon said the pace of the upturn would hinge on state governments reducing barriers to delivery rather than adding new ones.
High taxes and charges on apartment builders and financiers had constrained supply, he said, but initiatives such as the NSW Government’s recent underwriting program showed how policy could help accelerate the recovery.
The report also highlights that the apartment rebound will occur alongside continuing strength in detached home building and a solid pipeline of renovation work. Detached house commencements are set to total 115,070 in 2025, up 7.2 per cent on last year, with activity expected to peak at 125,840 in 2027 before easing as land shortages tighten and apartments become relatively more affordable.
Multi-unit starts are projected to reach 72,070 this year, up 17.2 per cent from 2024’s 13-year low, before climbing steadily to almost 100,000 by 2029.
Mr Reardon stressed that the coming apartment cycle would not be speculative.
