The trend is certainly positive, with approvals in 2024 almost five per cent higher than the year before, but new supply is still not coming through the pipeline quickly enough to prevent home prices kicking off again in 2025.
December's rebound was driven by an uptick in apartment approvals, with private dwellings excluding houses growing 15.2 per cent.
More listings and less competition in major cities could give first-home buyers a chance. (Mick Tsikas/AAP PHOTOS)
But long approval times and barriers to project feasibility were limiting the number of apartments the sector could deliver, Property Council of Australia spokesman Matthew Kandelaars said.
The total number of dwellings approved jumped back above 15,000 but remained well short of the 20,000 homes required each month to meet the National Housing Accord's target of 1.2 million new properties over five years.
"Sadly, we still have plenty of work to do to get on course for success," Mr Kandelaars said.
"We need action to tackle rising construction costs, labour shortages, planning delays, slow approvals and shifting state property taxes that punish foreign investment if we want to arrest the decline."
While building activity is climbing out of a trough, a lag in supply will continue to keep a floor under home values.
Nationally, prices were flat in January despite declines in the heavyweight markets of Sydney and Melbourne, analysis from property data firm CoreLogic revealed.
Approvals for apartments surged in December, ABS data shows. (Dan Himbrechts/AAP PHOTOS)
The market is proving more resilient than CoreLogic research director Tim Lawless had expected.
"The trend leading into the end of last year was clearly one of losing momentum and it looks like that may have been either interrupted or paused through January with a flat outcome nationally," he told AAP.
Mr Lawless said the downward cycle in housing values appeared to be shallow and short-lived, given the prospect lower interest rates would drive up borrowing capacity and demand.
With consumer sentiment rising, buyers might be tempted to get in now to beat the rush, Mr Lawless said.
NAB executive for home ownership Andy Kerr said an increase in listings and a decline in competition in Melbourne and Sydney presented a "real opportunity" for those looking to enter the market.
Home values in Melbourne and Sydney declined 0.6 per cent and 0.4 per cent over the month, respectively, while Brisbane, Perth and Adelaide continued to strengthen.
Combined regional home prices are again outstripping combined prices in the capitals. (Stuart Walmsley/AAP PHOTOS)
Another narrative emerging from the data is a second wind for regional markets.
After the initial pandemic jump in regional home values deflated, combined regional prices are once again outpacing combined capitals.
That was due to a return of the affordability advantage of regions, where prices are still coming off a lower base, as well as a rebound in internal migration trends away from cities, Mr Lawless said.
"But interestingly, when we look at the top performers across regional markets over the past 12 months, they aren't your commutable markets - your Newcastles or Wollongongs or Gold Coast - they tend to be much more rural markets," he said.
Townsville in North Queensland had experienced the strongest growth over the past 12 months, while central Queensland towns of Gladstone and Rockhampton were close behind.
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