Housing approvals bounce back but market still subdued

A surge in new apartments has fuelled a rebound in sluggish housing approvals, as the coalition floats the possibility of withholding GST payments from states if they don't meet construction targets.

There was a 10.4 per cent increase in the number of dwellings given the green light in July, driven by a 32 per cent jump in new apartments, Australian Bureau of Statistics building approval figures show.

While the monthly figures were a boost from a 6.4 per cent drop in June, approval numbers are still down 5.1 per cent compared to the five-year average.

The jump in July approvals has been driven by an increase in high-density housing, with more than 2500 apartments signed off in buildings that are nine storeys or higher.

The figures showed a resurgence in building approvals but overall levels were still down, senior economist at Oxford Economics Australia Maree Kilroy said.

"This jump is not, however, a concrete indication of a turning point for apartment construction,'' she said.

"Outside of some niche markets, the run up in interest rates continues to weigh on apartment pre-sales.

"For build-to-rent, financing has become more difficult with policy uncertainty holding back some institutional investors."

Master Builders Australia chief executive Denita Wawn welcomed the figures.

"July marked the very first month of the new National Housing Accord, which seeks to deliver 1.2 million new homes by June 2029," she said.

"Today's figures show that we have started the accord on the front foot."

The coalition has flagged the possibility of withholding GST and infrastructure payments from jurisdictions if they fail to meet housing targets.

Opposition infrastructure spokeswoman Bridget McKenzie said the measure could be a way to put pressure on states to ease the housing crisis.

"There is a range of levers available to the Commonwealth to incentivise state and local governments to increase housing supply," she told AAP.

"The Commonwealth taxpayer contributes billions of dollars in infrastructure funding through national partnership agreements and grant programs."

Resources Minister Madeleine King hit out at the proposal, warning it was a way of denying states such as Western Australia their share of GST.

The proposal coincides with the Greens launching a plan for increased protection for renters.

The party said it would set up a renters protection authority to enforce national standards for tenants.

The national authority would have the power to investigate and fine landlords and real estate agents and refer offenders for prosecution.

Landlords found to have breached the standards could be issued with on-the-spot fines of more than $3700.

Greens housing spokesman Max Chandler-Mather said the authority would give renters more of a say.

Housing figures have also risen for a 19th consecutive month, CoreLogic data has shown, but growth has slowed as more buyers are priced out of the market.

A cooling housing market over winter has been flagged with figures revealing national growth of 0.5 per cent in August.

It's slightly above the 0.3 per cent increase recorded in July, according to its Home Value Index update released on Monday.

But the pace of growth has slowed with the quarterly increase in national home values (1.3 per cent) less than half the growth rate in the same three-month period in 2023, when it was 2.7 per cent.