The price gap between building a new home and buying an existing one is narrowing. This is a shift that is attracting close attention across the construction sector. Industry experts hope this trend will encourage more Australians to consider building rather than buying established properties. An increase in new builds could help ease Australia’s ongoing housing crisis and improve long-term housing supply.

With population growth continuing to place pressure on housing availability in Australia, affordability remains a major challenge in many parts of the country, particularly in capital cities and fast-growing regional areas. While rising construction costs during the COVID pandemic pushed some buyers away from new builds, recent cost stabilisation has started to change the equation.

As the gap narrows, new construction is once again emerging as a more realistic and competitive option for many buyers.

So, what does this mean for Australia’s construction industry?

What’s behind this trend?

Ray White chief economist Nerida Conisbee says the narrowing gap between the cost of building and buying has become particularly evident over the past year. This follows a period of sharp volatility in both housing prices and construction inputs.

“We have found that over the year, the gap between building a new home and buying an established one has narrowed,” she told the Financial Review.

Experts say this shift is being driven by strong population growth, which continues to increase demand for existing properties. At the same time, while the cost of building a new home rose sharply during the COVID pandemic, those costs have since plateaued as supply chains stabilise and materials prices ease.

Why apartments are an increasingly attractive option

The gap has narrowed most significantly for apartments, which do not carry the same land costs as detached homes. The Housing Industry Association of Australia predicts that construction of apartments, townhouses and semi-detached homes will rise faster than standalone houses over the next three years as affordability pressures persist.

Limited availability of land is also pushing more buyers towards higher-density living, particularly in inner-city and middle-ring suburbs. As demand for apartments increases, construction activity — which has stagnated over the past decade — is expected to ramp up in the coming year.

How will this impact the construction industry?

Australia is currently experiencing a severe shortage of affordable housing and is struggling to keep pace with the needs of its growing population, despite strong demand across residential markets.

Experts hope that encouraging more people to build will help address the country’s chronic undersupply of new homes and support housing targets. However, while current trends are viewed as positive, there are warnings that future interest rate rises or policy changes could jeopardise this progress.

These shifts in the housing market have important implications for people working in construction — as well as those considering entering the industry. Changes in demand for apartments, higher-density housing and new builds can influence the types of projects moving ahead, the skills employers prioritise and where job opportunities are most likely to emerge.

For construction professionals, understanding these trends can help you position your experience, qualifications and achievements in line with what employers are looking for as the industry responds to Australia’s housing challenges.

If you are looking for a new career or your next opportunity in the construction sector, Construction Resumes can help. We offer professional resume writing and cover letter writing services designed to highlight your skills, experience and suitability for roles across residential, commercial and infrastructure projects.

Article References

Bleby, M (12 January 2026) ‘It’s getting easier to build a new home – for now’, Financial Review, accessed 15 January 2026.