The suburbs where we’re building the most new homes

Australia is in the midst of a housing crisis with supply challenges and demand pressures leading to a clogged pipeline of unfinished new home builds and approvals per capita languishing at decade-lows. There aren’t enough tradies to finish the homes under construction in normal timeframes. Meantime, construction costs have risen by 40 percent since late 2019 and contributed to dramatically higher insolvencies among building companies. High interest rates and lengthy approval processes have also prompted some developers to shelve plans for new projects altogether.

All of these challenges mean the National Housing Accord, with its ambition to build 1.2 million well-located homes over the next five years, will begin shortly amid very difficult conditions. However, the Federal and state and territory governments have agreed to the plan and plenty of money was allocated in the recent Federal Budget to get the program officially underway from 1 July.

Meanwhile, the Housing Industry Association (HIA) has published a report revealing the areas that are in line to receive the most new homes soonest, based on the value of approvals during FY23. The HIA has paired this data with population figures to identify the growth hot spots across Australia.

HIA economist Maurice Tapang said the top 20 hot spots for new approvals and above-average population growth were predominantly suburbs with greenfield developments. These developments require state governments to fund and build supporting infrastructure such as power lines, sewage and water pipes, roads and footpaths to service thousands of new residential lots.

“This is testament to the role that greenfield developments play in supporting the growth of our cities,” Mr Tapang said. “The drivers of housing demand are population and economic growth. Supporting population growth will require supplying adequate homes, which will entail providing the necessary infrastructure and land supply to grow our cities.

“As the high cost of the typical house and land package in some of our capital cities becomes out of reach to the typical income earner, it is important for policymakers to facilitate the supply needed to fill housing shortages. In order to build the Australian Government’s target of 1.2 million homes, there needs to be a healthy balance between greenfield and infill developments to support building well-located homes of all types.”

Australia’s top 6 home building and population hot spots

Box Hill – Nelson

In NSW, the top new home building hot spot is Box Hill – Nelson in Sydney’s Hills District, with $597 million in approvals and population growth of 26.5% in FY23.

Fraser Rise – Plumpton

Fraser Rise – Plumpton in Melbourne’s west was Victoria’s biggest growth hot spot, with $660.1 million in approvals along with 26.4% population growth.

Marsden Park – Shanes Park

Located in Sydney’s Blacktown area in the western suburbs, Marsden Park – Shanes Park booked $370 million in approvals and 19.7% population growth.

Tarneit – North

Located in Melbourne’s western suburbs, Tarneit – North recorded $384.3 million in new home building approvals and 18.9% population growth.

Rockbank – Mount Cottrell

Also in Melbourne’s western suburbs, Rockbank – Mount Cottrell had $593.4 million in approvals and 18.7% population growth.

Chambers Flat – Logan Reserve

Chambers Flat – Logan Reserve in the City of Logan, south of Brisbane, was Queensland’s biggest growth hot spot with $264.6 million in approvals and 18.4% population growth.

Australia’s housing crisis will not be solved by first-home buyer incentives or tax changes alone, with leading property figures warning governments must tackle supply constraints if affordability is to improve.

Speaking at the Kanebridge Quarterly Property Leadership Summit in Sydney last week, expert project marketing specialist Sam Elbanna, property investor and fund manager Paul Miron and property consultant Karla McNeice said that a lack of housing supply remained the central issue facing the market.

Elbanna, Director of CPM Realty with more than 30 years’ experience in project sales, argued that successive governments had focused too heavily on stimulating demand rather than addressing the barriers preventing new housing from being delivered.

“The misconception is that politicians think the way to solve the housing crisis is to drive demand,” he said.

“The reality is that’s not the way. This is a supply-side problem, and it needs to be solved on the supply side.”

Drawing on his experience in project sales, Elbanna said policies designed to help first-home buyers often had unintended consequences, pointing to previous grants that ultimately flowed through to higher property prices.

Instead, he said developers were facing increasing red tape, approval delays and rising costs, which were discouraging new housing supply.

“In the absence of stock, demand exceeds supply,” he said.

Miron, a Co-Founder and Fund Manager of Msquared Capital, said the housing debate had become overly focused on tax policy while overlooking broader structural issues.

He argued that affordability challenges stemmed from a combination of factors, including planning constraints, supply shortages, migration levels and interest rates.

“No-one can be 100 per cent certain on the real reason for property prices is going up,” he said.

“The reason why property prices are higher is a combination of interest rates, lack of supply, migration, vacancy rates and maybe taxes play a role.”

Miron was critical of recent federal housing policy changes, warning they could reduce the number of new homes being built and further constrain supply that was even highlighted in the budget.

He also highlighted the importance of the property sector to the broader economy, noting that residential real estate and related industries employed more than one million Australians.

McNeice, who advises developers on sales strategy and market intelligence, said understanding buyers had become increasingly important as affordability pressures intensified.

While affordability remained a major consideration, she said today’s buyers were focused on value rather than simply price.

“People are looking for value for money,” she said.

She said buyers were increasingly evaluating factors such as transport connections, walkability, nearby amenities and flexible living spaces that could accommodate changing family needs.

“What infrastructure is going on? Can I walk to the shops? Can I meet people at the local cafe?” she said.

The panel also discussed the mounting pressures facing developers, with Elbanna arguing that many projects become financially unviable from the moment a site is purchased.

“The viability of a development happens at the moment the site is bought,” he said.

He said rising construction costs, higher interest rates and overly optimistic feasibility assumptions had left some developers exposed as market conditions changed.

While acknowledging the growing number of smaller and first-time developers entering the market, Elbanna said property development required expertise across finance, construction, marketing and legal disciplines.

“It is actually a business that requires a level of expertise,” he said.

Looking ahead, the panel agreed opportunities remained in the market despite current challenges.

Miron said property should continue to be viewed as a long-term investment and cautioned against trying to time short-term market movements.

McNeice said success would increasingly depend on identifying projects that genuinely met changing buyer expectations.

Elbanna said affordable housing remained achievable, but developers needed to deliver more than just homes.

“We can provide affordable housing in this country,” he said.

“But we’ve got to wrap that affordable housing with the things that people want.”

As Australia’s housing affordability debate intensifies, the panellists agreed on one point: without a meaningful increase in housing supply, demand-side measures alone are unlikely to solve the nation’s property challenges.