New South Wales is experiencing a surge in housing development, spurred by density bonuses, according to Oxford Economics Australia. Official figures released on Wednesday revealed a 12 per cent monthly jump in new housing approvals, reaching a seasonally adjusted 17,076 in June. This represents the highest monthly total in almost three years. The increase was largely driven by a 34 per cent surge in approvals for apartments, semi-detached dwellings, and townhouses, particularly in Sydney.
Despite the overall increase, Australian Bureau of Statistics figures indicated a decline in approvals for new detached houses nationally for the second consecutive month. Timothy Hibbert, Head of Property and Building Forecasting at Oxford Economics Australia, suggests that policy changes and decreasing borrowing costs are setting the stage for continued growth in housing development throughout the current financial year.
Hibbert noted that density bonuses for developments incorporating affordable housing in NSW are effectively incentivising apartment projects. These initiatives aim to increase the supply of diverse housing options, especially in urban areas.
Looking ahead, Hibbert anticipates further rate cuts in August and the fourth quarter, driven by softening employment and inflation indicators. He believes that lower mortgage rates, combined with policy support such as increased funding for social and affordable housing, will sustain growth in the housing sector into the 2026 financial year.
