According to the June 2024 PropTrack New Homes Report, there has been a significant increase in both views and inquiries for new homes on realestate.com.au compared to the same period last year. Views for new homes have risen by 9%, while inquiries have surged by 27%.
Simultaneously, there has been an increase in views and inquiries for total available properties for sale, growing by 7% and 11%, respectively.
Karen Dellow, Senior Data Analyst at PropTrack, points out that despite an increase in newly listed homes, market demand still far exceeds supply, prompting homebuyers to shift their focus towards the new homes market.
She states, "The number of new development projects listed on realestate.com.au has increased by 6.64% compared to last year. However, slow progress in building approvals for new development projects currently cannot meet the rapid housing demand driven by population growth."
Shane Oliver, Chief Economist at AMP, also warns that the issue of housing undersupply may worsen further. He highlights that high levels of immigration combined with cost and approval constraints in housing construction contribute to the ongoing housing shortage.
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Data from the Australian Bureau of Statistics (ABS) released in April indicated a slight decrease of 0.3% in residential building approvals in April, despite a 2.7% increase in March.
The report further notes that due to concentrated supply, new apartment projects in inner-city Melbourne and the Gold Coast attract the most potential buyers. Additionally, Canberra saw the highest listing inquiries in May, followed by the Richmond-Tweed area of Melbourne.
Karen Dellow further explains, "The cost of new apartments and detached houses is higher compared to existing properties, leading developers to focus more on the small-lot market and luxury home buyers. This trend exacerbates the shortage of affordable housing, forcing more first-time buyers out of the new homes market."
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However, with real estate prices continuing to rise and reaching historical highs, the gap between prices of existing homes and new homes has started to narrow, making new homes once again a preferred choice for buyers.
According to Domain's 2025 fiscal year forecast report, prices for detached houses across Australia are expected to increase by 3 percentage points, while unit prices are forecasted to rise by 2 percentage points. Although national house price growth is expected to be lower than in 2023 and 2024, markets in Perth, Adelaide, Sydney, and Brisbane are forecasted to set new highs in the next fiscal year.
The report indicates that house prices in all major cities are expected to rise, with Sydney, Melbourne, Brisbane, Perth, and Adelaide forecasted to increase by 2 percentage points, Canberra by 4 percentage points, and the Gold Coast and Sunshine Coast each by 3 percentage points.
Domain also identifies factors driving price increases, including population growth, changes in housing demand structure, and limitations on construction numbers.
In the current market environment of high house prices and interest rates, prospective buyers should apply for pre-approved loans in advance and undertake sound financial planning to avoid unnecessary economic losses. Our professional advisors can provide comprehensive loan solutions and excellent after-sales service to assist with your property purchase needs.
