welling approvals jumped 8.2 per cent in December according to new data, with imported timber helping to ease supply chain issues and building delays.

According to new Australian Bureau of Statistics (ABS) data, December’s boost in building approvals follows a 2.6 per cent rise in November.

New South Wales recorded the biggest surge in dwelling approvals, up 32.1 per cent, while Victoria increased 2.5 per cent.

Approvals for private sector houses rose in Western Australia (0.8 per cent), but fell in all other mainland states: New South Wales (down 7.9 per cent), South Australia (down 7.1 per cent), Victoria (down 1.5 per cent) and Queensland (down 0.7 per cent), in seasonally adjusted terms.

Despite the falls, Mr Rossi said demand for new houses was still strong.

“While approvals for private houses have fallen from all-time highs, the series remains at historically elevated levels, with the December result 20.5 per cent higher than the pre-pandemic level in December 2019,” he said.

HIA Economist Tom Devitt said demand for new homes was the highest on record last year.

“Building approvals for detached housing also remained elevated at the end of 2021 to produce the strongest year on record,” he said.

“There were over 150,000 approvals for detached homes in 2021, which was 26 per cent up on the previous year and 11 per cent higher than the previous calendar year record set in 1988.”

The soaring demand, combined with closed international borders, skills shortages and rising material costs have significantly impacted builders and caused timber shortages.

But Mr Devitt said the tight supply of timber was starting to subside with imported materials filling the gap.

“Shortages of timber have caused extended delays to house building over the last year and a half,” Mr Devitt said.

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