Australia is building apartments at the prices buyers can't afford

Australia may need more apartments, but new research suggests the homes reaching the market are increasingly disconnected from what buyers can afford.

The realestate.com.au New Homes Buyer Preferences FY26 report reveals a stark mismatch between the budgets of prospective new-apartment buyers and the prices of advertised stock.

Just 12% of surveyed apartment buyers and considerers had a budget of at least $1.5 million. Yet properties at this level represented 53% of the new-apartment listings analysed by realestate.com.au.

At the other end of the market, 36% of prospective buyers were working with budgets below $700,000, while only 11% of advertised new apartments fell into that price bracket.

The middle of the market was also undersupplied relative to demand. Buyers with budgets between $700,000 and $1.499 million accounted for 52% of respondents, compared with 35% of listings.

In other words, almost nine in 10 prospective buyers had less than $1.5 million to spend, but more than half of advertised new apartments were priced above that threshold.

The findings come from an independent survey of 2,016 new-home buyers and considerers conducted during February and March 2026. That included 1,003 people in the apartment market, with the survey findings supplemented by realestate.com.au listings data.

The results do not necessarily mean that half of all apartments under construction are premium properties. The listing figures reflect advertised new-apartment stock on realestate.com.au rather than the entire development pipeline. Even so, they provide a clear picture of the properties buyers can see and potentially purchase.

That visible market is heavily weighted towards its most expensive segment.

Budgets are rising, but supply is moving faster

Apartment buyers have substantially increased their budgets in recent years.

The average budget among respondents rose from $861,000 in late 2023 to $934,000 in late 2024 and $988,000 in early 2026—an increase of almost 15% in a little over two years.

The proportion of buyers with less than $700,000 to spend consequently fell from 54% in 2023 to 40% in 2024 and 36% in 2026. Meanwhile, the share targeting the middle price band rose from 38% to 52%.

But this increase in purchasing budgets has not been enough to bring the available stock into alignment with demand. The greatest concentration of advertised apartments remains above $1.5 million, a level accessible to only a small minority of those surveyed.

The mismatch helps explain why demand for new homes can appear healthy without translating smoothly into sales. Buyers may want a new apartment, but interest alone cannot overcome a large gap between their borrowing capacity and the asking price.

Price was the most commonly cited reason people stopped considering a new home. Almost one-third—32%—said buying or building new had become too expensive, up from 29% in the previous survey.

Buyers are spending longer in the market

The affordability gap is also visible in the time apartment buyers spend searching.

The average apartment-buying journey reached 22 months in March 2026, up from 16 months in late 2023. Buyers spent an average of six months monitoring the market and another five months searching for properties before progressing to inspections, offers and settlement.

That means half of the average journey passes before a buyer reaches the stage of seriously inspecting available projects.

Budget shock was identified as the leading reason buyers found it difficult to move forward. Faced with premium-heavy listings, prospective purchasers may need to save a larger deposit, reassess their expectations or wait for a suitable property to become available.

Many are also widening their search.

The average distance apartment buyers were prepared to move increased from 22km in 2024 to 28km in 2026. The proportion looking within five kilometres of their existing home fell from 35% to 29%, while the share considering properties 20km to 50km away rose from 21% to 26%.

This suggests buyers are responding to the pricing mismatch by looking beyond their preferred neighbourhoods rather than simply increasing their budgets.

A development feasibility dilemma

The imbalance does not necessarily reflect a failure to understand the market. New apartment projects face high costs for land, construction, finance, planning and compliance. Developers may favour premium projects because higher sale prices are needed to make construction financially viable.

But the survey illustrates the resulting policy and commercial challenge. Australia needs additional housing, particularly in established locations close to jobs, transport and services. If new apartments can only be delivered at prices beyond the reach of most buyers, increasing the number of projects will not automatically address affordability.

The market risks producing an abundance of choice for a relatively narrow group while leaving the largest pools of demand competing for limited lower-priced stock.

House-and-land listings were more closely aligned with buyer budgets, although that segment also displayed a modest shortage at the premium end. The apartment findings were far more pronounced, making the issue difficult to dismiss as a general preference gap.

There is clear interest in new homes. Eighty-eight per cent of apartment considerers were looking at both new and established properties, while the report found demand for new homes was climbing.

The problem is converting that interest into a purchase.

Until the price composition of new-apartment listings more closely reflects the budgets of prospective buyers, Australia’s apartment challenge will be about more than how many homes are built. It will also be about whether the homes being offered are the ones the market can afford.

For Jack Freeman, a compelling interior should not look as though it was completed in a single shopping trip.

The founder and designer behind FREEMAN & CO prefers rooms that develop through art, travel, commissioned furniture and objects collected over time. It is an approach that treats the home less as a decorative project and more as an evolving portrait of its owner.

“I am a true believer in collecting versus decorating,” Freeman says.

That distinction underpins the international practice he has built across private residences, hotels, property developments, yachts and private aviation. Its projects stretch from Point Piper, Vaucluse, Circular Quay and Toorak to Mayfair, Bel Air and the Caribbean.

Although the locations and architecture vary considerably, the work is connected by a restrained design language. Natural stone, warm timbers and sculptural furniture establish the foundation, while art, bespoke lighting and individual objects give each interior its identity.

The objective is not to overwhelm a room with obvious symbols of expense. It is to create an environment that feels calm, layered and particular to the people living within it.

“The greatest luxury isn’t about excess,” Freeman says. “It’s about creating an oasis where you come home and feel immediately grounded — effortlessly chic and deeply personal.”

Collecting instead of decorating

Decorating can imply the completion of a room: selecting the required furniture, filling the available walls and producing a coherent finished image.

Collecting is less conclusive.

A collected interior has room to change as its owners travel, discover artists, inherit pieces or reassess how they use their home. Its character comes from the relationship between objects rather than adherence to a single brand or season.

That does not mean placing unrelated pieces together without discipline. The designer must understand scale, proportion, material and provenance well enough to create a dialogue between them.

A contemporary artwork might sit beside a historic piece of furniture. A precisely detailed new interior may be interrupted by an irregular object made by hand. Smooth stone can be balanced by timber, textiles or a patinated metal surface that becomes richer with age.

The tension between those elements is part of the appeal.

For Freeman, art is not an accessory to be added once the furniture plan is complete. It forms part of the architecture and atmosphere of the room from the beginning.

Lighting is considered in the same way. Beyond its practical purpose, a bespoke fitting can operate as a suspended sculpture, changing both the room’s composition and the way its materials are experienced after dark.

A design perspective shaped by travel

International travel plays a significant role in Freeman’s creative process.

Design fairs such as PAD Paris and Salone del Mobile in Milan provide opportunities to encounter emerging designers, established galleries, new materials and collectible furniture away from the filter of social media.

More spontaneous discoveries can prove equally important.

“Sometimes it’s the simple things,” Freeman says. “That piece found on a shopping trip with a client in Paris, stumbling across an artisan’s workshop, or a special memory that forms the narrative of the story.”

Objects selected during travel bring more than visual interest into a home. They carry an association with a place, maker or experience, giving the client a connection that cannot be reproduced by ordering an entire interior from a catalogue.

Freeman’s influences are international, but his projects are not conceived as replicas of Parisian, Milanese or Californian style. Each commission responds to its architecture, setting, natural light and the daily lives of its occupants.

A waterfront Sydney residence demands a different treatment from a Mayfair townhouse. A Caribbean estate shaped by brutalist architecture and reflecting pools calls for another response again.

The designer’s role is to absorb those references without allowing them to overwhelm the individual qualities of the property.

Designing the complete experience

FREEMAN & CO extends beyond conventional interior decoration.

The practice’s stated services include interior design and architecture, project management, property acquisition, development advice, concept design, documentation, furniture and lighting design, procurement and art curation.

That breadth allows the team to become involved before a room’s dimensions and finishes are fixed.

Early participation can be important at the top end of the residential market, where architecture, landscape, interiors, technology and art must operate as one environment. Decisions about ceiling heights, wall dimensions, sightlines and lighting can directly affect where art is installed or how custom furniture is proportioned.

The practice can then carry those decisions through to procurement and final installation, maintaining the design narrative as a project moves between architects, builders, specialist craftspeople, dealers and suppliers.

Its residential portfolio includes a South Coast retreat conceived as an escape from urban life, a Caribbean estate with reflecting pools, an East Coast-inspired Palm Beach residence and a Mayfair townhouse organised around an expressive drawing room.

The studio also says it has worked on highly tailored Sydney residences with values exceeding $100 million, although the private nature of such commissions means individual addresses and clients are not always disclosed.

A home that can keep changing

The risk in creating a perfectly resolved interior is that it can become too static — a composition that looks exceptional in photographs but leaves little room for life.

Freeman sees the home as something that should evolve with its owners.

“I love the evolution of design,” he says. “We are talking about people’s lives, and as they evolve, so too should their private sanctuaries.”

That evolution might involve adding art, reupholstering a significant piece, adapting rooms as a family changes or making space for objects gathered through future travels.

The original design needs to be strong enough to accommodate those layers.

This may be the clearest expression of Freeman’s approach to luxury. It is not simply access to rare stone, collectible furniture or commissioned craftsmanship. It is the creation of a personal environment whose meaning deepens rather than diminishes with time.

Fact box

Designer: Jack Freeman

Role: Founder and managing director

Practice: FREEMAN & CO

Base: Australia, with international projects

Project locations named by the practice: Point Piper, Vaucluse, Circular Quay, Toorak, Palm Beach, the NSW South Coast, Mayfair, Bel Air and the Caribbean

Sectors: Private residences, hotels, residential developments, private aviation and superyachts

Services: Interior design and architecture, property development, project management, property acquisition, documentation, furniture and lighting design, FF&E procurement, interior dressing and art curation

Design philosophy: Collected, personal interiors shaped by art, craftsmanship, travel and enduring materials

Website: free-man.co

Australia is building apartments at the prices buyers can’t afford

Budgets are rising, but supply is moving faster

Buyers are spending longer in the market

A development feasibility dilemma

Jack Freeman believes the most compelling interiors are not decorated, but collected. The FREEMAN & CO founder creates layered, personal spaces shaped by art, travel and craftsmanship.