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For the first time in over five years, apartments now make up more than a quarter (25.1%) of all new home approvals, as Australia pivots toward medium and high-density housing to tackle the housing crisis. Three-storey buildings are leading the charge with 86% annual growth, while houses have dropped to their lowest share (57.7%) since 2018. Despite this progress, apartment construction remains 44% below levels from a decade ago, and overall housing approvals sit 19% behind 2015 figures, even as Australia's population has grown by 4 million people.
New analysis reveals Australia has reached a critical milestone in its housing crisis response, with apartments now comprising 25.1% of all new home approvals for the first time in over five years.
The shift marks a fundamental change in how Australia builds homes. While houses still dominate at 57.7% of annual approvals, the last time the proportion was this low was nearly seven years ago in December 2018, down from pandemic highs of 67% in 2021.
The apartment resurgence is being driven by an 86% annual surge in three-storey buildings, signalling that medium-density housing is emerging as a crucial solution to Australia's housing crisis. These mid-rise developments are clearly returning in popularity with both property developers and residents as a middle ground between detached houses and high-rise towers. High-rise developments (9+ storeys) are also growing strongly at 43%, but with these towers accounting for a reduced 61% of all new apartments, down from 67% at the end of 2024.
While Australians have a historical preference for houses, apartment construction remains critical for affordability. Despite 50% annual growth in apartment approvals compared with just 1% for houses, apartment construction sits 44% below levels from a decade ago. Houses are down just 6% over the same period, meaning total approvals are 19% below 2015 levels despite Australia's population growing 16.8% over the same period - an additional 4 million people.
- 25.1% Apartments as a share of all new home approvals, highest in five years
- 86% Annual surge in three-storey apartment building approvals
- 57.7% Houses as a share of approvals, lowest since December 2018
- 50% Annual growth in apartment approvals vs just 1% for houses
- 44% How far apartment construction sits below decade-ago levels
- 19% Below 2015 total approvals despite 16.8% population growth
Annual Growth in Building Approvals by Property Type
Annual Growth in Apartment Approvals by State
Annual Growth in House Approvals by State
Australia is finally building more apartments, but it's still not enough. The surge in three-storey "missing middle" housing signals a crucial shift away from the binary choice between detached houses and high-rise towers, offering a more palatable density solution for suburban areas. This matters for affordability: apartments are growing at 50 times the rate of houses, yet overall supply remains deeply inadequate. With approvals still 19% below 2015 levels despite 4 million more Australians, the housing crisis won't ease until construction accelerates further. For homebuyers, this trend means more apartment options in the pipeline, particularly medium-density developments that balance space and affordability. But with apartment construction still 44% below where it was a decade ago, the structural undersupply that's driven prices skyward will take years to resolve, even with the current momentum.
