New home building is set to pick up this year, as investors turn to new house and land packages.
Oxford Economics Australia research predicts total dwelling commencements will increase by 4.5% in FY2025. It also tips another 4.3% increase the following year.
Oxford Economics Australia, head of property and building forecasting Timothy Hibbert says a lot of the demand for new houses is coming from property investors who are buying a larger share of the house and land packages than in the past.
He says that is because there are fewer off-the-plan apartment developments underway, so investors are shifting their focus from units to houses.
“We used to see first home buyers make up a much bigger share, but their numbers have fallen back quite significantly when it comes to house and land purchases,” he says.
Hibbert says in Victoria, 76% and NSW, 71%, more investors took out loans for the construction of dwellings in December 2024 compared to five years earlier.
The trend he says is also emerging in the other states.