Demand for new homes has surged in 2024, with views and inquiries for new development listings outpacing those for all properties for sale on realestate.com.au.
Views for new homes have risen by 9% this year compared to the same period last year, and inquiries have increased by 27%.
In comparison, views for all properties for sale have grown by 7%, while inquiries are up by 11%. Despite more homes being listed for sale this year compared to 2023, demand continues to exceed supply, driving property seekers towards the new homes market.
The number of new development listings on realestate.com.au has increased by 6.64% from last year. However, building approvals for new developments remain slow and insufficient to meet the population’s growing needs. Private sector house approvals fell by 1.6% in April but increased by 9% year-on-year, while apartment approvals declined by 1.1% month-on-month and 8.5% from last year.
With new apartment construction contributing the largest volume of new properties, approval rates for this type of build need to rise to meet buyer demand and ease housing supply shortages. The residential construction industry has faced challenges due to the pandemic, supply chain issues, and skilled labor shortages, causing financial difficulties for many companies.
The number of construction companies has decreased compared to five years ago, affecting building approvals and the new homes pipeline. However, a slight increase in active listings for new developments offers more choice for property seekers looking for a brand-new home.
Where Are Most New Developments?
The largest share of new developments is in NSW, VIC, and QLD, which have the largest populations and the highest internal and external migration rates.
Inner Melbourne has the most new apartment listings, comprising 17% of the total inventory. The Gold Coast is second, with the most new apartment listings found in Surfers Paradise.
In Sydney, the North Sydney and Hornsby region has the most new developments.
Apart from the Gold Coast, most apartment developments are in inner suburbs of the capitals, especially in CBD areas.
Land estates are primarily in outer city areas. Melbourne’s western suburbs have nearly 10% of all house and land developments in Australia, with Melbourne’s southeast and Geelong also having a large proportion of listings for this property type. Five of the top ten areas are in Victoria, followed by three in QLD.
New Developments Attracting Property Buyers
New apartment developments in inner Melbourne and the Gold Coast attracted the most inquiries from potential buyers due to the concentration of listings. However, Canberra had the most inquiries per listing in May, followed by Melbourne’s west and the Richmond-Tweed region.
The most in-demand apartment development in May was Central Park in Malvern East, featuring luxury apartments with large windows overlooking 19 acres of parkland. The most in-demand house and land development in May was Yanchep Junction in Perth’s northwest, which will include 546 properties, a train station, school, and health precinct.
Looking Ahead
Building new homes remains costly due to rising material prices and a shortage of construction workers.
Although the growth in construction costs has slowed compared to 2022 levels, it remains challenging to get new developments off the ground and completed on time.
The higher cost of new apartments and houses compared to established properties has led developers to target the downsizer market and wealthier buyers.
This trend exacerbates the shortage of affordable housing, pushing more first-home buyers out of the new homes market.
However, as property prices continue to rise and reach record highs, the price gap between established properties and new constructions is beginning to narrow, making new constructions a viable option for home buyers again.
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