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Construction work on nearly 40,000 homes across Australia has yet to start despite them being given building approvals, new research shows.
The analysis from KPMG Australia reveals Sydney and Melbourne account for almost half of approved but not yet commenced apartments, townhouses and houses.
High costs in building materials over recent years and the interest rate spikes have been blamed for the construction lag.
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In Sydney up to last December, building work was yet to start on 11,170 dwellings with approval, while Melbourne had 6840 that had not broken ground.
Compared with the five-year December average, the amount of stalled housing is 7.7 per cent higher in Sydney. Melbourne recorded am 11 per cent spike.
KPMG urban economist Terry Rawnsley says nearly 80 per cent of the "approved but not yet commenced" projects were apartments and townhouses.
"There is always a lag between housing being approved and construction commencing, but current estimates show an abnormal number of dwellings sitting in this category, suggesting other market factors are stalling the pipeline of new builds," he said.
Bigger costs of materials and finance were making it harder for developers to build larger projects profitably, he said.
Potential buyers' purchasing capacities were also impacted by increases in interest rates.
Brisbane recorded an 8 per cent increase in stalled housing over the five-year trend, according to the KPMG figures.
The ACT set a record for dwellings approved but not begun, nearly doubling from 864 to 1772.
Adelaide and Perth remained stable.
A long list of constructions businesses have fallen into administration or collapsed entirely since the pandemic.
This week Stevens Construction, a New South Wales company that has completed hundreds of millions of dollars worth of building projects, entered voluntary administration.
