Media Release – Master Builders Tasmania, 4 February 2026
Rate Rise Dampens Housing Approval Optimism
The Reserve Bank of Australia’s decision to raise interest rates by 25 basis points to 3.85 per cent has put a dampener on positive signs in the housing market, Master Builders Tasmania CEO Jenna Cairney said.
Ms Cairney said during December 2025, a total of 216 new homes were approved across Tasmania.
“This was 11.3 per cent higher than the previous month and represents a 10.2 per cent increase on December 2024,” she said.
“While most of the rest of the country saw significant declines in approvals, in Tasmania, December 2025 was the strongest month for new home approvals since February 2025.”
However, over the year to December 2025, a total of 2,426 new homes were approved in Tasmania, equivalent to 2.5 per cent fewer homes than in the 12 months to December 2024.
This compares with a requirement for 5,162 new homes per year under the National Housing Accord – a shortfall of 2,736 homes in just one year.
“We will be watching closely how this rate rise will impact the market,” Ms Cairney said.
The pain of interest rate increases and high inflation can be expected to suppress construction activity given these conditions make business investment more expensive and less attractive.
“While it was positive to see home approval increase before Christmas, the big question will be whether these homes proceed to get built given the change in economic circumstances.
“Master Builders Tasmania continues to call for governments at all levels to look at easing red tape and fixing labour shortages.
“The building industry employs 10% of the Tasmanian workforce and a healthy industry means a healthy economy.
“Building and construction activity has a sizeable impact on the performance of Australia’s economy with every additional $1 million of residential building work generating an extra $2.5 million in activity across the whole economy.”
