Australia’s Knockdown Capital Reveals: Most Houses Face Destruction Ball

As Australia strives to achieve its lofty home construction goals, new data shows that thousands of homes are planned to be demolished nationwide.

Data from the Australian Bureau of Statistics shows that over 20,000 homes have been approved for demolition in the past year.

The vast majority of properties designed to be demolished are homes, with 18,864 approved to be razed, while 1146 units.

A city is leading the removal of the drive, and the 6075 Melbourne property is approved for demolition.

Sydney is the next most popular demolition city with plans to knock down 5,351 houses and 340 units.

In Brisbane, 2106 properties were approved to be revoked, while Perth had 1433.

There are much fewer plans to be demolished in smaller capitals. In Canberra, only 249 homes were approved for demolition, followed by Adelaide (58), Hobart (37) and Darwin (17).

Approved House Demolition – One year to March 2025

Outside the capital, the New South Wales region (1759) will sell the most homes here, followed by the Queensland region (1152) and Victoria (1042).

The data covers the year in March 2025, meaning many of these homes may have disappeared.

But while data shows plans to remove thousands of homes from Australia’s housing stock, many homes were approved for construction over the same period, more than nine times more.

Approved unit demolition – One year ended March 2025

In the 12 months to March, about 181,000 new homes were approved, which would be once built, which would contribute to the ongoing housing shortages in the country.

But that is far less likely to be much slower to reach the federal government’s goal of building 1.2 million new homes by 2029.

A clear way to demolish more houses

Rea Group senior economist Anne Flaherty said the main reason for the demolition of the house was to make room for new properties.

“The demolition was because new homes were built,” she said. “We did see more approved homes than they were demolished.”

“But if we look at how many homes we need to build, we need to consider the fact that part of the new home to be built will lead to demolition.”

Demolition data may include many instances, where one house is expected to be replaced by two or more houses, such as duplexes or townhouses, or a few houses are replaced by apartment buildings.

“Hopefully, in every demolished house, it can lead to more than one house instead of it,” Ms. Flahti said.

It has been proposed that the densification of established suburbs is an answer to the housing crisis, and the suburbs along the transport corridor offer the maximum potential for medium and high-density housing.

New program controls, such as the development plan for Transport in NSW, are expected to increase the number of apartment buildings built throughout the suburbs – a move that has the potential to result in more older homes being demolished, making room for an increase in unit count.

However, high construction costs and interest rates have affected the feasibility of many developments in recent years, limiting the number of new homes built, while demolition rates are less than in previous years.

Demolition approval peaked in the year to June 2022, when interest rates remained low, while Australia is in a boom in the housing construction costs have not yet skyrocketed to current levels.

Building approvals also peaked during the low interest rate year in Australia, a period of large grants for owners through the Home Builders Program.

Although recently approved, much fewer homes approved for construction during this period.

Cost tightening leads to construction transfer

Ms Flaherty said high interest rates and construction costs also impact the types of homes built throughout Australia.

“Building new ones is very expensive, which means the type of houses built is most likely to bring enough profits for developers,” she said.

“Currently, the wide range of housing and land parcels in the outside area are the most viable new housing products.”

“When building apartments and townhouses, the cost per square meter is much higher than the house, so we haven’t seen the same level as new unit developments we’ve seen before.”

Additionally, Ms. Flahti said most of the unit stocks currently under development are concentrated in higher markets, which is more profitable than cheaper homes.

Low and high prices may start building boom

Ms Flaherty said construction costs are unlikely to drop, meaning other factors need to be transferred to get more projects out of trouble.

“As interest rates fall, this will help make more projects feasible,” she said.

“Residential approvals are indeed implemented in states with rising prices and once we start seeing higher home prices in Victoria and New South Wales, we hope to start seeing growth in residential approvals.”

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