Over the period 2020–2025, the composition of dwelling construction by building type has shifted slightly. Monthly dwelling approval data indicates a change in how the housing sector has adjusted its capacity to respond to strong demand.
For houses (single-detached dwellings), approval numbers peaked in 2021 and 2022 at 143,000 and 126,000, respectively, representing increases of 33% and 17% from the 2020 figure of 108,000. Approvals then declined in 2023 and 2024, largely due to supply-side constraints such as high material and labour costs, before rebounding in 2025 (Table 1).
These trends suggest ongoing challenges in expanding housing capacity, including barriers related to land availability, planning approvals, and delays in delivering the necessary supporting infrastructure.
Townhouses of two or more storeys show a similar trend to detached houses, likely reflecting strong housing demand in metropolitan and major urban areas, where subdivision is becoming more common to support housing affordability. Single-storey townhouses, in particular, recorded significant growth between 2024 and 2025, increasing by 28% from 7,400 to approximately 9,500 dwellings. However, despite this growth, townhouses as a share of total dwelling approvals have remained relatively stable at around 17%.
Table 1: Dwelling approvals by type 2020-2025
The most notable shift is observed in apartments, particularly those with nine or more storeys, typically classified as high-density developments. Prior to 2025, these apartments averaged around 21,000 approvals per year. In 2025, this increased significantly to approximately 27,300 units, representing a 34% rise (Figure 1).
Figure 1: Dwelling Composition by type 2020-2025
Source: ABS, FWPA Analysis
This trend highlights a growing shift towards vertical expansion in housing supply, rather than horizontal development, which typically requires more land and additional infrastructure. It aligns with the broader view that high-density apartment developments can play a key role in addressing housing supply and affordability challenges, particularly when located within well-connected inner-city areas. As seen in many global cities, improving housing supply outcomes will ultimately depend on effective and well-coordinated urban planning.
