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Property

The great Australian dream slips further away with construction price spikes

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As home building costs soar past half a million, even before land, first-time buyers are left out in the cold with no end to the crisis in sight

The latest official data from the Australian Bureau of Statistics shows that it now costs more than  $500,000 to build the average house in Australia and that doesn’t include buying the land.

Given that the price of residential land is also escalating to record price levels, the reality is that the typical house and land package in a capital city is beyond the reach of most young buyers.

The rising cost of construction, to beyond the means of many first-time buyers, is contributing substantially to the national housing crisis.

It’s a bit of a vicious circle, Australia needs to build more homes – a lot more than the industry is currently able to build – but the obscenely high cost of building both houses and apartments is the largest single barrier to achieving it.

According to the Australian Bureau of Statistics, in 2024 Australia fell 70,000 home approvals short of the target set to fix the housing crisis while at the same time home building costs hit a  new record high.

There were 170,719 homes approved in 2024, the second worst annual figure since 2012, with experts warning government efforts to address the housing crisis so far have failed to make a difference.

Making a bad situation considerably worse is the soaring cost of home sites.

The Housing Industry Association (HIA) says that surging land values are problematic for the struggling development sector, which is already battling soaring labour and materials costs.

HIA figures showed the median price of land across Greater Sydney now stands at $2,000 per sq m, that means even a tiny 300 square metre block of land costs $600,000.

Land prices are less – but still very expensive – in Melbourne, where that small block costs $320,000, and it’s similar in both Perth and Brisbane.

Those figures are based on a 300 sq m block which is really below the normal block size. In Sydney the median lot price is $710,000 compared to around $400,000 in both Melbourne and Brisbane.

Add on that typical cost for building a home – and it makes a new house on land more than $900,000 in Brisbane and Melbourne – and around $1.2 million in Sydney.

It begs the question: are politicians in government around Australia even aware that the cost of a new house on land is getting scarily close to $1 million?

Tim Graham is the Managing Director of Hotspotting and host of The Property Playbook on Ticker. 

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Property

Investors discover 25 top house markets for growth

New report reveals 25 Australian suburbs offering strong rental growth, affordability, and investment potential

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New report reveals 25 Australian suburbs offering strong rental growth, affordability, and investment potential

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In Short:
– New research identifies 25 Australian house markets offering affordability, yield, and growth for investors.
– Strong local economies and infrastructure investments drive demand in these markets, ensuring long-term capital growth.
As rental markets tighten across Australia, new research identifies 25 house markets where investors find a strong match of affordability, yield, and growth.
The latest Pulse report by Washington Brown and Hotspotting highlights suburbs outperforming national trends, offering sustainable investment opportunities.
The list includes regions from New South Wales, the Northern Territory, Queensland, Tasmania, and Victoria.Banner

These selections are based on solid fundamentals, including strong local economies, infrastructure investments, and low vacancy rates, according to Hotspotting General Manager Tim Graham.

The report emphasises the potential for cashflow-positive outcomes without sacrificing long-term capital growth.

“These are not speculative picks,” Hotspotting General Manager Tim Graham said.

“They’re backed by real fundamentals, including strong local economies, infrastructure investment, and low vacancy rates.

“We’re identifying locations where investors can achieve cashflow-positive outcomes without sacrificing long-term capital growth.”

Strong Markets

Examples include Park Avenue in Rockhampton, which experienced a 29.1% annual price increase, and Lismore in New South Wales, surging 26.8% despite flood recovery efforts. Washington Brown Director Tyron Hyde notes that these markets are resilient and attract strategic investors focused on long-term growth rather than short-term returns.

“These markets are resilient, affordable, and on the move,” Mr Hyde said.

“They’re attracting investors who are thinking strategically and not just chasing short-term returns, which is always a bad idea.”

Regions like Victoria’s Red Cliffs and Mooroopna, as well as Northern Territory’s Moulden and Rosebery and Tasmania’s Ravenswood, signify a shift towards regional centres with increasing demand and infrastructure development.


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Property

Why government policies keep driving property prices higher

“New book reveals politicians’ policies inflate property values, making homes less affordable; insights for buyers from Terry Ryder.”

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“New book reveals politicians’ policies inflate property values, making homes less affordable; insights for buyers from Terry Ryder.”


Politicians often speak about housing affordability, but a new book reveals how their policies are in fact fuelling higher property values and making homes less affordable. Terry Ryder from Hotspotting joins to discuss his new book Why Property Values Rise.

We explore what politicians really want when it comes to property prices, how location myths mislead buyers, and why luxury features like pools or prestige suburbs aren’t what really drive value.

Ryder also explains how constant change shapes the housing market, what myths investors should ignore, and the key insights every buyer needs to know.


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Property

The hidden costs driving Australia’s housing crisis

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The biggest single problem causing Australia’s housing crisis is the cost of creating new dwellings.

The cost of the standard city house-and-land package is now $950,000 and is getting scarily close to $1 million for a newly constructed house in our capital cities.

Governments of all levels and persuasions tell us constantly that they desperately want to improve housing affordability, but what few of them shout about as loudly is that about 40% of the cost of new housing is made up of government taxes, fees and charges.

It seems incongruous that when cost is the biggest factor preventing new dwellings from being built, governments, which promise they are working on solutions, are doing nothing to ease the tax burden.

Builders and developers cannot deliver their normal products because the cost of construction is prohibitively high.

Earlier this year, the Productivity Commission revealed that government interference and bureaucracy had massively reduced productivity in the building industry.

Delays double the timeline

It now takes twice as long to deliver a new home compared to the 1990s.

This alone added considerable cost to new homes to the point where it is often no longer financially viable to build.

Recent analysis by the National Australia Bank confirms this. Its quarterly Residential Property Survey found that high construction costs and delays in getting approvals are by far the biggest barriers to producing new homes across Australia.

While much of the media would have us believe that interest rates are a big barrier, that was not the case, with very few of the survey respondents nominating that or tight finance as an issue.

It doesn’t matter how many new homes the Federal Government says it will build: until the issues of bureaucratic delays, high property taxes and the overall cost of construction are dealt with, building targets will not be met and the shortage will remain.

Terry Ryder is the Founder of Hotspotting and Host of  The Property Playbook on Ticker.

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