Property views for new homes have surged by 9% this year compared to last year, with inquiries soaring by 27%. In general, views for all properties for sale have risen by 7%, and inquiries have increased by 11%.
Despite a higher number of homes being listed for sale this year, the demand is outpacing supply, leading more buyers towards new homes.
Private sector house approvals experienced a slight decline of 1.6% in April but showed a significant 9% year-on-year increase. Conversely, apartment approvals fell by 1.1% month-on-month and saw an 8.5% drop from last year. The residential construction industry has been grappling with challenges such as the pandemic, supply chain disruptions, and labor shortages, which have reduced the number of construction companies and impacted building approvals. Nonetheless, the rise in active listings for new developments is providing more options for those looking to purchase new homes.
Most new developments are concentrated in New South Wales, Victoria, and Queensland, driven by high population growth and migration. Inner Melbourne leads in new apartment listings, followed by the Gold Coast and North Sydney. Land estates are primarily located in outer city areas, with Melbourne’s western suburbs accounting for nearly 10% of Australia’s house and land developments. Victoria boasts five of the top ten regions for land estate listings. New apartment developments in inner Melbourne and the Gold Coast are highly popular, with Canberra seeing the highest inquiries per listing in May. Central Park in Malvern East emerged as the most in-demand apartment development.
Building new homes continues to be costly due to high material prices and a shortage of construction workers. Although the rise in construction costs has decelerated since 2022, starting and completing new developments on schedule remains challenging. Developers are now targeting downsizers and wealthier buyers, which exacerbates the shortage of affordable housing and displaces first-home buyers from the new homes market. However, as property prices reach record highs, the price gap between established properties and new constructions is narrowing, making new constructions a more viable option for home buyers.
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