Home loan approvals for newly built dwellings have plummeted to their lowest level in nearly two decades, according to new analysis from Money.com.au.
The report, based on ABS lending data, showed lenders issued just 3,783 loans for new builds in the March quarter—the weakest result since September 2006.
These figures include off-the-plan properties, newly converted residential dwellings, and house-and-land packages.
This represents a 13% decline from the March 2024 quarter, which was already the lowest point of the decade at the time.
The sharp drop is a sign of deeper systemic issues in Australia’s housing pipeline, said Jacob Overs (pictured left), Money.com.au general manager of lending.
“New housing stock isn’t coming through fast enough because developments are being delayed or scrapped altogether due to cost blowouts, labour shortages, and red tape,” Overs said.
“With new builds taking longer to make it to market, there are fewer loans to be written for those entry-point properties,” Overs said.
He said the shortfall is especially impacting first-home buyers, many of whom are unable to access government incentives due to limited supply.
“There’s a huge missed opportunity here, especially for first-home buyers,” Overs said.
“Governments are pouring money into incentives to help them buy new homes, including cash grants and stamp duty concessions, but the homes themselves just aren’t there for buyers to take advantage.”
“This means many are being pushed into buying existing properties and miss out on government support that’s specifically targeted at new housing.”
Peter Drennan (pictured right), Money.com.au’s data and research expert, noted that current loan figures for new dwellings are 56% below the December 2020 peak, when 8,510 loans were issued in a single quarter.
Annual data tells a similar story. In the year to March, just 19,153 new dwelling loans were issued—marking the lowest annual total since 2013. This compares to a high of 32,964 loans in the year to September 2021, representing a 42% decline.
