Property Council NSW Executive Director Anita Hugo said that in September, 4,800 new dwellings were approved, up from 3,680 in August.
"This is good news, but approvals are only the first step in the pipeline for completed homes," Ms Hugo said.
"NSW needs around 75,000 homes approved each year to meet its 2029 housing target - and while the lift in September is encouraging, the trend shows only 52,462 were approved over the last 12 months, leaving a shortfall in the pipeline of nearly 23,000 homes.
"The data is another clear signal that reform can't wait - approvals remain too low, while demand for housing continues to increase. Every lost month pushes more people out of the housing market."
Ms Hugo said the data underlined the need for the NSW Parliament to quickly pass the Planning System Reforms Bill when it returns next week.
"This Bill addresses the system's biggest pain points – long delays, inconsistent decisions, and a lack of clear coordination.
"This is not the time for delay – the Bill before Parliament next week is the circuit-breaker NSW needs.
"These reforms will help clear the backlog, cut duplication between agencies and fast-track good projects that deliver homes, jobs and infrastructure," she said.
"The choice before Parliament next week is simple: act now or accept that housing supply will continue to fall short and affordability will worsen."
Under the Bill, a new Development Coordination Authority would centralise agency referrals and approvals, the Housing Delivery Authority would be enshrined in law, and a Targeted Assessment Pathway would be introduced for straightforward applications.
"These are practical steps the industry has called for - real fixes that can make an immediate difference," Ms Hugo said.
