Freecity has released its ‘Innovation Insights No.6 – 2026 Needs Apartments with BTR Supercycle!’ report, written by Chief Strategy Officer, Steven Mann. It discovered that, during 2025, the NSW Government delivered a turnaround in housing approvals, with total approvals rising 19% to 52,427 dwellings, and apartment approvals surging 48% to 17,930.
However, approvals alone won’t deliver the Housing Accord. By December 2025, 18 months into the Accord, actual completions remain 39% below target, creating a steeper run rate if NSW is to reach 377,000 new homes by June 2029. Even if NSW repeats Q3 25’s 12,979 completions in Q4, the gap continues to widen, Freecity reported.
According to Freecity, the Housing Accord focusses on delivery, not approvals, and delivery requires a pipeline that matches demand. Right now, the missing piece is apartments.
Large apartment developments typically need 2.5 to three years from packaging to completion. That means 2026 must mark the beginning of an ‘Apartment Supercycle’ – a decisive acceleration in approvals and commencements to ensure completions land inside the Accord window.
To stay on track for 377,000 completions, NSW must dramatically lift approvals; especially given the historical 15% plus gap between approvals and completions and the long construction periods for higher density housing.
Assuming strong growth in detached and medium density housing driven by current policy settings, the remaining shortfall must be filled by apartments and Build to Rent. The numbers are stark.
This means NSW needs around 60,000 apartment approvals in 2026 (double the 2025 result), and an even larger number of commencements, given the growing pool of approved but not yet started developments.
Recently, NSW achieved a similar ramp up for apartments, with approvals growing to 35,620 in 2016, delivering 31,605 units at the peak in 2018 (42.4% of the 74,592 total dwellings delivered). For the long-term, apartment/Build to Rent needs to be 50% or more of housing supply in NSW if we are to meet demand, and industry needs to size up to 30,000 to 40,000 apartment completions a year.
According to Freecity, the State Government’s creation of the Development Coordination Authority (DCA) is an important step. Faster post DA approvals will help get projects to commencement sooner, which is essential for hitting Accord timelines.
However, it has been identified that NSW also needs:
- Feasibility support for apartment projects.
- Lower taxes and contributions, especially in Western Sydney where commencements are thin.
- Targeted incentives to bring shovel ready projects forward.
- Build to Rent is a critical part of the solution. It brings institutional capital, higher density living, and long-term stewardship: exactly what TOD cities need, but Build to Rent commencements are stalling under rising construction costs and elevated taxes. Federal and State governments must align to support this emerging asset class now, not later.
Freecity currently has a pipeline of around 6,000 apartment and Build to Rent units. Its Volumetric Modular Construction model will deliver major projects 12 to 18 months faster, directly lifting productivity and helping NSW meet its Accord commitments. 2026 is the year NSW must ignite the Apartment Supercycle.
