PropTrack New Homes Report - January 2025


Karen Dellow
Karen Dellow

New home approvals are still below the federal government's Housing Accord target but have been trending upwards since March 2024.

New approvals need to hit an average of 20,000 per month to reach the government's 1.2 million new homes target by mid-2029.

So far, they have been averaging 14,800 per month since the start of the financial year and are showing no signs of increasing to the monthly levels needed to reach the goal.

However, approvals have been trending upwards on a monthly basis since March, although only by an average of 2% a month.

There are several factors that are affecting the number of new developments going up for approval, in particular the decrease in the number of construction companies compared to five years ago, affecting building approvals and the new homes pipeline.

The cost of building has also increased since the pandemic, with everything from metal and bricks to plumbing and ceramic products all more expensive.

Additionally, a lack of skilled labour is driving up wages, which adds to the cost of construction.

All these factors are slowing down the construction pipeline, which has been over $70 billion since December 2022.

And with so much money and labour tied up in these projects, it is hard for construction companies to commit to more projects.

Most of the backlog began during the pandemic, due to site closures and labour shortages, but at least now the ongoing work in the pipeline has levelled out and has remained relatively stable for the past few years.

Current projects listed for sale

Despite the subdued level of new approvals, there has been a slight increase in the number of project listings on realestate.com.au over the past 12 months.

In December 2024, project listings were 5% higher than the same time in 2023, with house and land projects in Victoria and New South Wales driving this growth.

There has also been an uptick in retirement living projects in VIC, NSW, and QLD, although developments of this nature continue to be in small numbers, which is surprising considering the aging population of Australia has increased demand for retirement living.

Apartment development growth was also down in most states and this is also reflected in the monthly new dwelling approvals, where apartment approvals are below historical levels.

Larger and more expensive developments replacing more affordable homes

There has been a trend towards higher priced properties with more bedrooms and this has been at the expense of more affordable, entry-level apartments and house and land packages.

The cost of building new dwellings has escalated so much that developers are struggling to make a return on one-bed apartments and two-bed houses.

Source: realestate.com.au.

This has resulted in larger homes being built that are specifically targeting cashed-up downsizers and young professionals.

In December, 60% of new apartment development listings in realestate.com.au were priced at $800,000 or higher, compared with 40% just two years ago.

Source: realestate.com.au.

However, enquiries for apartments priced at $400,000 or less have increased, as well as for houses between $600,000 and $800,000.

Most in-demand new developments

West Residences in Mount Lawley, Perth, was the most viewed apartment project in December 2024.

Inspired by the Flat Iron Building in New York City, it has panoramic views that stretch across the city skyline, the Swan river and Perth hills.

Most viewed new apartment project listings in December 2024

Property type Suburb State Project name
Apartment Mount Lawley WA West Residences
Apartment Melbourne VIC West Side Place
Apartment Surfers Paradise QLD Jewel Surfers Paradise
Apartment Glenside SA Glenside
Apartment Palm Beach QLD Eva Palm Beach
Source: realestate.com.au.

Prices start at $975,000 and is a reflection of the style of properties that are currently being built by developers.

The apartments all have high quality finishes and appliances and there is an orangery in the building offering dedicated dining and serene yoga spaces.

West Residences in Perth was the most viewed apartment project in December 2024. Picture: realestate.com.au.

Three of the five most viewed apartment projects have a starting price of more than $900,000, with the top tier apartment in Jewel Surfers Paradise selling for $7million.

The top two apartment developments with cheaper options are still selling one-bed apartments for over $500,000, indicating that new builds are more expensive to buy than established properties.

The most viewed house and land developments was Everleigh in Greenbank, QLD with land parcels starting at $353,000.

Most viewed new house and land project listings in December 2024

Property type Suburb State Project name
House and Land Greenbank QLD Everleigh
House and Land Morayfield QLD Affinity Morayfield South
House and Land Forestville SA Forestville
House and Land Kidman Park SA Precinct Kidman Park
House and Land Keperra QLD The Quarry, Keperra
Source: realestate.com.au.

The developer also offers house and land packages from some of Queensland’s best builders, as well as completed houses.

The second most viewed house and land estate, Affinity Estate, Morayfield, QLD, offers homes that have two properties on one plot, perfect for multi-generational living.

Looking ahead

The subdued new dwelling approvals, along with the increasing pipeline of work, is slowing down the development of new housing needed to fix the housing crisis and hit government targets.

Additionally, the lack of affordable homes being built, due to the cost of materials and labour, is excluding some first-home owners from the new homes market and targeting those with plenty of money to spend.

Artist impression of homes at The Quarry, Keperra, QLD, the fifth most viewed new development in December 2024. Picture: realestate.com.au

The increasing cost of materials is slowing and if the skilled labour shortage can be addressed by offering cheaper training schemes, or offering visas for skilled migrants, developers could afford to build more entry level dwellings again.

However, it will take time to turn the ship around and in the short-term the focus for developers continues to be on larger, luxury properties that provide a good return.

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