Building approvals may be rising, but the numbers tell a deeper story for property investors. As someone who works closely with everyday Australians mapping out their long-term property investment strategy, I believe looking beyond the headlines is critical. While approval volumes have edged up, we remain significantly behind in meeting Australia’s growing housing demand.

This persistent undersupply is more than just a policy concern—it’s a strategic signal. For investors, it presents both opportunity and risk. In this article, I’ll unpack the latest trends for housing availability and rental pressure and why well-selected new builds in the right growth areas remain a compelling path forward.

2025 Approval Growth Falls Short

According to the Australian Bureau of Statistics, 15,220 dwellings were approved in March 2025, up 13.4% from the same period last year. The increase was primarily driven by homes approved for building by private developers that were not standalone houses, such as semi-detached, row or terrace houses, townhouses, and apartments. These were up 47.1% year-on-year.

However, the upward trend remains below the National Housing Accord’s goal to facilitate building 1.2 million new homes between July 2024 and July 2029. We would need more than 20,000 approvals a month to achieve this, as not every dwelling approved results in a completed home. While March’s results represent a substantial year-on-year increase, they still fall short by nearly 5,000 approvals.

Why this matters for investors

Rising approvals can signal the early stages of new development cycles—often a good time to buy. Here’s why new builds may be worth a closer look:

Long-term growth potential

New builds are often positioned in growth corridors underpinned by planned infrastructure investment, creating strong long-term value drivers for property investors.

For example, in suburbs close to Sydney’s Metro line extension, dwelling values have grown considerably. According to Domain, in Bankstown, where the Sydenham to Bankstown line is expected to be completed in 2026, house values have increased by 60.0% in the five years to March 2025. In Castle Hill, where the new Castle Hill Metro Station opened in 2019, house values were up 67.9% in the last five years, while unit values have grown 16.2%.  

Having access to public transport adds value to property over time as it improves the accessibility and functionality of the location. Investing in these locations while they are still in development can provide strong capital growth as the area matures and demand for housing increases.

Tax benefits

New builds often provide valuable tax advantages through depreciation. Unlike established properties, brand-new homes allow investors to claim deductions on a broader range of fittings, fixtures, and construction costs. These depreciation schedules can significantly enhance cash flow and improve overall investment returns, but it’s important to note that claimed depreciation may reduce your cost base, which could increase capital gains tax when the property is eventually sold.

Modern designs

New builds are more likely to reflect current design preferences and meet updated building standards. This can improve liveability, functionality, and tenant appeal, helping attract a broader and more reliable rental market. Newer designs may also reduce vacancy periods and allow for stronger rent positioning, especially in competitive areas where presentation and layout directly influence tenant demand. 

Energy efficiency

Newly built homes must meet a minimum 7-star rating under the Nationwide House Energy Rating Scheme (NatHERS). This means your rental property will be more energy efficient, another factor in attracting quality tenants. Conversely, retrofitting an existing home with energy-efficient features is more difficult and likely more expensive.

Potential stamp duty savings

Stamp duty is a state-based tax applied when purchasing property in Australia. However, some states offer exemptions or concessions on new builds, particularly for off-the-plan properties and house and land packages, depending on buyer type, contract structure, and purchase price. 

Recent policy changes in Western Australia and Victoria have expanded access to these concessions for certain off-the-plan purchases. These updates can offer a strategic advantage for investors seeking to optimise their entry costs. Even where stamp duty is payable, it can often be factored into the property’s cost base, potentially reducing capital gains tax liability when the asset is eventually sold. 

Fewer maintenance problems

With brand-new fittings, appliances, and construction, new builds generally require less maintenance, minimising unexpected costs in the early years of ownership. In my experience working with hundreds of property investors, older homes often demand significant annual cash flow to cover repairs, replacements, and ongoing upkeep. For many clients, these hidden costs add up quickly and impact overall portfolio performance. Choosing a well-built new property can reduce that burden and provide greater predictability in your investment strategy. 

Rental market

New builds offer a solution to Australia’s tight rental market. With a shortage of available rental properties, especially in high-demand areas, newly constructed properties can help bridge the supply gap. 

According to SQM Research, the national rental vacancy rate was recorded at 1.1% in March 2025, well below the 2-3% range typically considered the sign of a balanced market. This means that demand for rentals significantly exceeds supply, putting upward pressure on rents and increasing your income. 

Why a Qualified Property Adviser Can Help

A property adviser brings structure and clarity to what can often feel like an overwhelming process. Rather than relying on instinct or fragmented advice, investors benefit from tailored support that helps them weigh risks, evaluate opportunities, and make informed decisions grounded in research, not guesswork.

This becomes especially valuable when considering new builds. Navigating developer incentives, assessing construction quality, and identifying the right growth corridors requires a level of analysis beyond what most time-poor investors can reasonably undertake on their own.

Whether your goal is to optimise cash flow, access available concessions, or strengthen your portfolio over time, the proper guidance ensures your investment strategy is sustainable and aligned with your broader financial direction.

For many investors, the real advantage is not having to track every market shift themselves. A dedicated adviser monitors building approvals, infrastructure planning, population growth, and shifting rental demand, offering the context and insight you need to stay ahead of the curve and make confident, forward-looking decisions.

Are you considering whether a new build should be part of your investment strategy? At SAFORE, we take the time to understand your goals and guide you toward opportunities that align with your life stage, borrowing capacity, and long-term objectives. We’ll help you assess your next step with clarity and confidence. Feel free to call us on 1300 69 77 67 or click here.