Minette Full and her partner Brandon French were among first-time buyers seeking a unit as a more affordable entry to home ownership. Picture David Clark
Almost nine out of 10 buyers are being locked out of Australia’s new apartment market, with new data revealing house hunters now need at least $1.5 million to afford the majority of new units being built.
Latest data from REA Group shows 56 per cent of new apartments listed on realestate.com.au nationally between February and March 2026 were priced at $1.5m or above, while just 12 per cent of buyers were willing or able to spend that much.
The staggering mismatch effectively prices everyday Australians out of what has traditionally been the country’s most affordable entry point to home ownership, throwing fuel on an already critical housing shortage.
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Supply of new units is under threat, with a huge mismatch between buyer budgets and new project price tags.
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Driven by soaring development expenses, builders are increasingly delivering high-end, premium apartments just to make their projects financially viable.
This shift had driven up the share of $1.5 million-plusstock while suffocating the entry-level market.
Despite 25 per cent of buyers holding a budget of $600,000 or below, they were forced to battle it out for a mere 5 per cent of the market priced to match.
REA Group Senior Economist Anne Flaherty warned the disconnect between what was being built and what everyday buyers could afford would have severe consequences for the broader housing market.
REA Group economist Anne Flaherty: ‘real consequences’
“With Australia already facing a housing shortage, this affordability gap could further slow the delivery of new apartments,” Ms Flaherty said.
“The gap has real consequences for supply. Even though apartment approvals are picking up, this mismatch between prices and budgets is likely to hold back pre-sales and delay new projects.”
A state-by-state breakdown shows buyer budgets were misaligned with developer pricing in every major market.
The situation was particularly dire in Queensland, which was now the most expensive state for new apartment developments.
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Three and four-bedroom units in this West End, Qld development are priced from $3.4m
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A massive 73 per cent of new listings in the Sunshine State were priced over $1.5m, catering to just 12 per cent of buyers.
Alarmingly, there were zero new apartment listings under $600,000 between February and March.
The squeeze was similarly tight in Victoria, where premium $1.5m-plus apartments made up 65 per cent of all new listings, despite only 10 per cent of local buyers having the capacity to pay that much.
This Collingwood, Vic project under construction is one of the limited projects with apartments priced under $1.5m
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Even across New South Wales and the ACT, 39 per cent of new apartments were listed at $1.5m or above and only 14 per cent of buyers looking to purchase at that premium level.
Meanwhile, Western Australia had the sharpest divide at the top end of the market.
While 64 per cent of new apartment listings were $1.5m or above, just 6 per cent of WA buyers actually had the budget to match it.
“Unless construction costs fall, designs change, or policies shift, the disconnect between what’s being built and what buyers can afford will remain a major challenge,” Ms Flaherty said.
Construction is nearing completion at this Castlereagh St development in Sydney CBD
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