New data reveals buyers in Australia's two most populated states are embracing the idea of owning a newly-built home.
Data from REA Group’s 2024 Property Seeker Report has found that over the past 12 months, 42% of homebuyers surveyed in both New South Wales and Victoria are considering buying or have already bought a new home.
This includes free-standing houses, townhouses, off-the-plan apartments and house and land packages.
The numbers are even higher for first-home buyers – over half (51%) of first timers in NSW and Victoria opted for new builds or are considering making the leap.
Amid a national housing crisis with low supply, low vacancy rates and soaring rent prices, the impressive results are part of a growing trend REA Group Senior Economist, Paul Ryan, finds unsurprising.
“New builds are popular with first-home buyers for a number of reasons. Cost has traditionally been a big draw – new houses are generally located on the edges of cities, and new apartments can present good value,” he explained.
Government incentives across Australia are also geared toward either first-home buyers or new builds, removing some barriers to entry. Other positives include having more time to save and prepare before moving in, as well as tailoring the property to work for your particular lifestyle and needs.
“The building timeline on new builds can give buyers more time to save, and they also often allow customisation, which buyers value,” Mr Ryan added.
| State | Property type: Newly built |
| New South Wales | 42% |
| Victoria | 42% |
| Queensland | 36% |
| South Australia | 48% |
| Western Australia | 40% |
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Victoria
Where first-home buyers are concerned, Victoria is an attractive entry point. Over the past few years there has been a drop in home prices, especially in Melbourne, with the market remaining relatively subdued, while other states such as Queensland surged ahead and dropped in affordability.
“Victoria has emerged as the state with the highest number of first-home buyers in the country,” confirmed REA Group Senior Economist, Eleanor Creagh.
In the past year, more than half of first-home buyers in NSW and Victoria opted for new builds or are considering making the leap. Picture: Bendigo, Victoria/Getty
Victoria also has a high proportion of new builds comparative to other states, which helps to support prospective buyers in their consideration of buying or building new. And with added Government incentives like the temporary off-the-plan duty concession where stamp duty is scrapped until October 2025, new builds are an enticing proposition.
“Victoria, in particular, has built more homes than other parts of the country, so it's not a surprise many new buyers there are considering new homes,” said Mr Ryan.
"But building approvals have slowed markedly, which suggests difficulty meeting supply targets going forward.”
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| 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 approvals, there are numerous local government areas (LGAs) within the state that are likely to see a significant uptick in the supply of new homes in the short to medium term.
These are areas where the number of approvals for new homes have been the highest in the 12 months to August 2024.
According to REA Group PropTrack data, the Casey, Melton and Wyndham LGAs led the way in terms of approval numbers for houses – there were 9438, 8982, and 8916 houses approved from September 2023 to August 2024, respectively.
In fact, the leading suburb for first-home buyers searching for houses is Tarneit (Wyndham LGA), located 30 kilometres from Melbourne's CBD in the western suburbs where the median house price is $650,000.
Other Melbourne suburbs popular with first-home buyers include Point Cook, Truganina, Werribee, and Hoppers Crossing, all similar in distance from the city and median house prices.
For apartments, the Melbourne, Port Phillip and Stonnington LGAs topped the list for new home approvals during the same period, with respective figures of 3540, 2266, and 1258.
MORE: Where the most new homes are being approved in Victoria: PropTrack
New South Wales
In New South Wales, conditions have been a tougher with lower building commencements than Victoria, but consumers are looking ahead.
"New building conditions remain really challenging in NSW, with new building commencements back at levels not seen for a decade. The weight of construction costs are limiting the viability of many projects right now – both for detached housing and higher-density projects," Mr Ryan explained.
"A few factors are likely to mean 2025 is more positive for new construction: lower interest rates when they finally arrive, the transport-oriented development (TOD) changes will make more land available for development projects, bringing the price down, and further price growth across Sydney will work to offset higher construction costs."
| Buyer Type | Property type: Newly built |
| Total | 41% |
| First-home Buyers | 52% |
| Upsizers | 44% |
| Downsizers | 39% |
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Despite the current low commencements, there are numerous LGAs within NSW that are likely to see a surge in the supply of new homes in the short to medium term, according to REA Group PropTrack data.
The LGAs where the number of approvals for new homes have been the highest in the 12 months to August 2024 include the Blacktown, Liverpool and Hills Shire for houses, with 3714, 3548 and 3260 approvals respectively.
For apartments, the Parramatta, Bayside and Hills Shire LGAs topped the list for new home approvals during the same period, with respective figures of 4230, 2040, and 1942.
The now-delivered and upcoming Metro line is a clear influence here.
PropTrack data also revealed that Marsden Park, located 50 kilometres northwest of Sydney's CBD, was the Sydney suburb that made the top 10 for first-home buyer hotspots. With a median house price of $985,000, it remains relatively affordable for Sydney, where budget-friendly options are scarce.
For apartments, 80% of the top suburbs for first-home buyers are in Sydney, with Parramatta leading the list.
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Since the introduction of the National Housing Accord target, fervent discussion across industry and consumers has ensued, with Governments putting forward reforms and new planning protocols to address pain points.
While supply remains constrained, 2025 may well see the tide turn on some of the issues facing the new homes sector, allowing more buyers to take advantage of well-built, energy-efficient homes.
In the meantime, savvy buyers in NSW and Victoria are moving ahead, jumping on the opportunity to build or buy new.
Looking for new properties? Browse our dedicated New Homes section.
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