Almost 40,000 homes across Australia waiting to be built as interest rates and building costs hit developers

House construction is lagging behind planning approval, with more than 37,000 homes yet to be built across Australia due to high interest rates and material costs. Photograph: Andrew Merry/Getty Images

Developers have yet to begin work on almost 40,000 new homes across Australia – including 11,170 in Sydney – despite being granted building approvals, with stubbornly high interest rates and construction costs being blamed.

According to KPMG analysis released on Tuesday, 15,593 dwellings with planning approval were yet to break ground across New South Wales by December 2023. It was only a slight improvement on the state’s figures a year earlier, when there were 15,818 approved dwellings across NSW where work was yet to commence.