New data shows buyers in Australia’s two largest states prefer newly-built homes.
Two states with nearly half favoring new homes
Data from REA Group’s 2024 Property Seeker Report reveals that 42% of homebuyers in NSW and Victoria are considering or have purchased new homes over the past 12 months.
This includes various property types such as free-standing houses, townhouses, off-the-plan apartments, and house-and-land packages.
Interestingly, the preference for new builds is even more pronounced among first-time buyers, with 51% in these states opting for new homes or considering doing so.
Given the ongoing national housing crisis, with low supply, high rents, and low vacancy rates, this trend is unsurprising, according to REA Group Senior Economist, Paul Ryan.
Ryan explains that first-time buyers are particularly drawn to new builds for several reasons, with cost being a major factor.
New houses are often located on the outskirts of cities, while new apartments may offer good value, making them appealing.
Moreover, government incentives aimed at first-home buyers or new builds have helped reduce some financial barriers to entry.
In addition, new homes provide buyers with more time to save and plan before moving in, which is beneficial.
Another advantage is the ability to customize the property to suit the buyer’s personal lifestyle and preferences.
As Ryan explains, the construction timeline gives buyers the flexibility to save more and make the home truly their own.
| State | Property type: Newly built |
| New South Wales | 42% |
| Victoria | 42% |
| Queensland | 36% |
| South Australia | 48% |
| Western Australia | 40% |
Victoria
For first-home buyers, Victoria offers an attractive entry point, especially with recent drops in home prices, particularly in Melbourne.
Over the past few years, Melbourne’s housing market has remained relatively subdued, while markets in states like Queensland surged ahead.
As a result, affordability in Queensland dropped, making Victoria’s market more appealing to first-time buyers seeking better opportunities.
According to REA Group Senior Economist Eleanor Creagh, Victoria now has the highest number of first-home buyers in Australia.
In addition, Victoria has a higher proportion of new builds compared to other states, supporting buyers considering purchasing or building new homes.
Government incentives, such as the temporary off-the-plan duty concession, which eliminates stamp duty until October 2025, further incentivize new builds.
“Victoria has built more homes than other parts of the country, so it’s no surprise new buyers are interested,” said Mr. Ryan.
However, he also noted that building approvals have slowed significantly, indicating potential challenges in meeting future supply targets.
| First-home buyers by state | Property type: Newly built |
| New South Wales | 51% |
| Victoria | 51% |
| Queensland | 48% |
| South Australia | 63% |
| Western Australia | 52% |
Despite the slowdown in building approvals, several local government areas (LGAs) in Victoria are expected to experience a rise in new home supply.
These areas have seen the highest number of new home approvals over the past 12 months, up to August 2024.
According to REA Group PropTrack data, the Casey, Melton, and Wyndham LGAs had the highest approval numbers for houses.
From September 2023 to August 2024, Casey approved 9,438 houses, Melton 8,982 houses, and Wyndham 8,916 houses.
For apartments, the Melbourne, Port Phillip, and Stonnington LGAs recorded the most approvals during the same period.
Melbourne saw 3,540 new apartments approved, Port Phillip had 2,266 approvals, and Stonnington approved 1,258 apartments.
New South Wales
In New South Wales, conditions have been more challenging, with lower building commencements compared to Victoria, but consumers remain optimistic.
According to Mr. Ryan, new building conditions in NSW are difficult, with commencements now at levels not seen in a decade.
The rising construction costs are limiting the feasibility of many projects, affecting both detached homes and higher-density developments.
However, Mr. Ryan believes several factors may improve the outlook for new construction in 2025.
Lower interest rates, when they eventually arrive, are expected to stimulate the market and improve building conditions.
Additionally, changes to transport-oriented development (TOD) will make more land available for development, potentially reducing land prices.
Finally, continued price growth across Sydney will help offset the impact of higher construction costs on new projects.
| Buyer Type | Property type: Newly built |
| Total | 41% |
| First-home Buyers | 52% |
| Upsizers | 44% |
| Downsizers | 39% |
Despite current low commencements, several LGAs in NSW are expected to experience a significant increase in new home supply.
According to REA Group PropTrack data, these areas are likely to see growth in new housing supply in the short term.
The LGAs with the highest number of approvals for new homes in the 12 months to August 2024 include Blacktown.
Blacktown, Liverpool, and Hills Shire led the way for house approvals, with 3,714, 3,548, and 3,260 approvals, respectively.
For apartments, the Parramatta, Bayside, and Hills Shire LGAs saw the highest approval numbers during the same period.
Parramatta approved 4,230 apartments, Bayside 2,040, and Hills Shire 1,942 apartments, making them the top areas for apartment approvals.
The introduction of the new Metro line has clearly influenced these areas, further spurring development and approvals.
Since the launch of the National Housing Accord target, there has been extensive discussion within the industry and among consumers.
Governments have responded by introducing reforms and new planning protocols aimed at addressing key issues in housing supply.
While supply remains constrained, 2025 may offer a turning point, with improvements in the new home sector expected.
This may allow more buyers to benefit from well-built, energy-efficient homes that are becoming increasingly desirable.
In the meantime, proactive buyers in NSW and Victoria are capitalizing on the opportunity to build or buy new homes.
