House and land searches climb to four-year high as buyer confidence improves
“The number of buyers looking to build or purchase a new home has surged, with activity reaching the highest levels seen in four years,” Anne Flaherty, senior economist at REA Group, writes on realestate.com.au.
The measurable shift in buyer sentiment was reflected in searches on the New Homes section of realestate.com.au, which rose in January to their highest level since January 2022.
The data suggests that Australians are actively exploring the option of building or purchasing brand-new homes.
Anne notes that the lift in search activity points to improving confidence after a period marked by construction cost pressures throughout the last few years.
“Over the six months ending January 2026, 80 per cent of all searches to buy new were for house and land.”
In Victoria, 26 per cent of searches on realestate.com.au were for new homes.
Arun, who purchased land to build a home with his partner in Burnside, said they chose to build to get what they wanted for what they could afford.
“We initially explored existing properties, however, we found that our savings weren’t quite sufficient to cover both a deposit and stamp duty on an established home. This led us to consider a house and land package.
“Perhaps most importantly, building our own home allows us to personalize it to our tastes and needs, truly putting our own stamp on the place we’ll call home.”
What’s driving the shift?
Interest rates peaked in late 2023 at their highest level since October 2011 and remained elevated throughout 2024. They have since dropped from the most recent peak of 4.35 per cent to 3.85 per cent, taking some of the pressure off mortgage costs.
At the same time, the Australian Government has launched a raft of housing and home building policies with the aim of getting hundreds of thousands of prospective homebuyers into the market.
Federal initiatives like the First Home Super Saver Scheme, 5% Deposit Scheme and Help to Buy Scheme, along with State-level incentives can incentivise building a new home rather than purchasing an existing home.
The Housing Industry Association (HIA) recently pointed out that in the final quarter of 2025, first home buyer loans were at their highest levels in four years, suggesting the jump was due to the much-publicised 5% Deposit Scheme.
“There were 31,780 loans issued to first home buyers in the final quarter of 2025, up by 6.8 per cent on the previous quarter, and the strongest performance in almost four years,” HIA Senior Economist Tom Devitt said.
Source: ABS / HIA - First home buyers loans up at highest levels in 4 years
Number of first home buyer loans in Australia by quarter.
Victoria’s Government last year extended the off-the-plan concession for land transfer (stamp) duty for new homes, where the construction cost is subtracted from the purchase price in the tax calculations.
“Off the Plan Concessions allow the homebuyer to tap into considerable stamp duty savings. It also helps the industry gain pre-commitments to proposed projects, helping them move from planning to construction more quickly,” UDIA Victoria CEO Linda Allison said.
As the average price of homes in major cities remains elevated, particularly in Brisbane and Sydney, buyers may be seeking more affordable options in new developments where they can build a new home.
Increased search activity on realestate.com.au indicates renewed interest and intent, and may signal a lift in new construction activity in the months ahead.
Some of the search traffic could also be buyers who had previously paused home building decisions but are now keen to get underway.
Adam Lockens, Sales Manager at Dennis Family Corporation (the developer of Donnybrae), says the interest aligns with feedback across residential developments in Victoria.
“We’re seeing more first home buyers actively comparing new home options again.
“After a cautious period, buyers are returning to research mode. They’re asking detailed questions about inclusions, timelines and total build costs. That’s a strong sign confidence is gradually rebuilding.”
He says that transparency has become central to buyer decision-making.
“Today’s buyers want certainty. Fixed pricing, clear documentation and builder stability matter more than ever. When those elements are clear, we’re seeing genuine engagement.”
Why new homes are back on the radar
For many first home buyers, building offers advantages that are particularly relevant in the current market:
- Price clarity at contract stage, rather than competitive auction bidding in established markets.
- Energy efficiency and modern standards - new builds must comply with updated building regulations and higher energy ratings.
- Design flexibility - the ability to tailor layout and finishes within budget.
- Access to growth-area masterplanned communities - new infrastructure and amenities.
- Employment flexibility - work from home arrangements make distance to the office less relevant.
For buyers weighing lifestyle factors alongside price, building a new home in a masterplanned community is a pathway to home ownership.
Meanwhile, Urbis has reported that strong population growth across Melbourne’s outer growth corridors is sustaining long-term demand fundamentals, even when short-term economic conditions fluctuate.
Anne says the data shows a persistent preference among families and first home buyers for larger homes at a more affordable price.
“Many buyers, particularly those seeking larger homes, have been priced out of inner- and middle-ring suburbs, pushing demand towards new housing estates in outer areas.
“An added advantage of buying new is the ability to lock in a price for a home that hasn’t yet been completed, offering some protection in a market where prices are still expected to rise,” Anne said.
For the first time since early 2022, the digital signals suggest that confidence - crucial in housing markets - is returning to the new home sector.
Learn more about Donnybrae
Talk to our team
The Donnybrae Sales Team have moved offsite and are available to assist you remotely via phone and email, Saturday - Wednesday.
For all enquiries, please contact Cheryl below:
Cheryl Pearson
Sales Consultant
1300 303 380
Email: [email protected]