The ABS's monthly release reported that approvals for private dwellings excluding houses, such as townhouses and apartments, jumped 26% to 7,219.
"This is following consecutive falls in July and August," said Daniel Rossi, ABS head of construction statistics.
Compared with the same month a year earlier, this category was up more than 55%.
In original terms, apartment approvals soared 81.7% to 5,430 dwellings, marking the highest level since December 2022.
"Townhouse approvals were also up in September, rising 5.7% (to 2,616 dwellings), in original terms," Mr Rossi said.
Private sector house approvals, on the other hand, saw a 4% lift to 9,547, also bouncing back from a 1% fall in August.
The total number of dwellings approved rose 12% in September to 17,019 (seasonally adjusted).
The value of total building approved fell 4.8% in September to $16.51 billion, following an 11.3% August uplift.
Total residential building rose 7.4% to reach a new all-time high of $10.11 billion.
The rise in total residential building value was comprised of an 8.2% rise in new residential building to $8.93 billion, and a 1.2% pick up in alterations and additions to $1.18 billion.
Apartment approvals drive rebound, but is it enough?
The data indicate that higher-density housing has become the main driver of new approvals, reversing a prolonged lull in apartment construction.
Economists at Westpac, through their own dwelling approvals report in September, noted that while detached-house approvals have stagnated since late 2024, low- and mid-rise developments are beginning to regain momentum.
With mortgage conditions stabilising and interest-rate pressures easing slightly, developers appear to be responding to pent-up demand and persistently tight rental markets.
However, despite the strong monthly rebound, the broader picture remains challenging.
Australia's national goal of delivering 1.2 million homes by 2029 requires an average of around 20,000 approvals each month, a level still well above September's total.
Private sector house approvals rise across the country
State-by-state results revealed that private-sector house approvals rose the most in New South Wales, up 7.8%, and in Victoria, up 7.3%.
Queensland was the only major state to record a decline, with house approvals down 6.9%.
"Despite the rise in September, house approvals are around the same level as they were this time last year," Mr Rossi noted.
Image by Anders Holm-Jensen on Unsplash
