Australia's apartment shortage is becoming a construction problem

For most of the past decade, the Australian housing debate has been an argument about planning. Approve more, the argument runs, and the dwellings follow. Across the eastern seaboard that assumption is now failing in a specific and measurable way: approvals have recovered, and completions have not.

On projects above 50 dwellings, the average interval between planning approval and practical completion has widened to 31 months, from 22 months in 2019. About nine months of that increase sits after the approval and before the first concrete pour.

The tender problem

Developers describe a tender market that has thinned to the point of dysfunction. Where a mid-sized apartment project would once attract five or six qualified builders, two or three is now typical, and at least one of those will usually decline to hold a price beyond 60 days.

“A twelve-month approval adds about six per cent to the cost of every apartment we deliver. Someone pays that, and it is not the planning system.”

Jane Smith, managing director, Example Developments

Builder insolvencies remain roughly 40 per cent above the pre-2022 average. The immediate cause has shifted: where 2022 and 2023 failures were driven by fixed-price contracts signed before the materials shock, current failures are more often working-capital failures on projects that were priced correctly but ran long.

Where the shortfall lands

• Melbourne: completions tracking at about 11,400 against an underlying requirement above 20,000.
• Sydney: apartment completions concentrated in the west, with inner and middle-ring delivery at a decade low.
• Brisbane: the strongest completion pipeline of the eastern capitals, but still short of population-driven demand.

The policy implication is uncomfortable. Planning reform remains necessary, but on current delivery rates a state could approve every application before it and still fall short of its housing target, because the constraint has moved downstream to the people who build.