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{{propApi.successMessage}} {{region}} Change locationApartment Construction Cycle Shaping Up for 2026 Recovery
Apartment Construction Cycle Shaping Up for 2026 Recovery
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HIA Chief Economist Tim Reardon said population growth, rising established home prices, and new policy measures are creating the conditions for the next major building cycle.
“Population growth remains elevated, migration is returning to metro areas and established apartment prices are rising faster than detached homes,” Mr Reardon said.
“These are the early signals of an emerging apartment cycle, as new developments once again start to stack up financially.”
Australia began just over 61,000 multi-unit dwellings in 2024, barely half the volume recorded in 2016 and well short of what is required to meet the national housing target. Multi-unit starts are forecast to increase by 6.5 per cent in 2026, rising steadily through the decade to reach close to 100,000 commencements by 2030.
Mr Reardon said the next cycle will depend on the ability of governments to support the delivery of new homes rather than constrain it.
“If state governments recognise that high taxes on apartment builders and financiers have limited supply and address these issues, the recovery could accelerate further,” he said.
“The NSW Government’s recent underwriting program for apartment projects is an encouraging first step.”
The report notes that this apartment recovery will occur alongside continued growth in detached home building and a strong pipeline of renovation work.
“This will not be a speculative boom.
It’s a necessary response to growing population pressures and rising demand for housing in our major cities,” concluded Mr Reardon.
Forecasts:
Detached houses: There were 28,620 detached houses that commenced construction in the March quarter 2025, with a similar 28,240 forecast for the June quarter, working its way back up to 29,470 by the final quarter of 2025. This will produce a 2025 calendar year total of 115,070 detached house starts, 7.2 per cent up on 2024. A steady improvement is expected to continue from here, reaching a 2027 peak of 125,840, before moderating back to 116,370 in 2029 as land constraints become more binding and new multi-units become relatively more affordable.
Multi-unit dwellings: There were 19,450 multi-unit dwellings that commenced construction in the March quarter 2025, which is expected to moderate back down to 17,440 in the June quarter and remain relatively steady for the rest of the year. This will produce a 2025 calendar year total of 72,070, up by 17.2 per cent on 2024’s 13-year low. A modest further improvement is expected to 76,570 in 2026, before accelerating towards 96,910 by 2028 and 99,960 in 2029, as rising prices in the established market catalyse the feasibility of new apartment projects.
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