Metricon’s Highland build in Gisborne is worth more than $1m, and an example of the Melbourne homes families are building to avoid buying their next place — and paying stamp duty.

Designer kitchens, an ensuite for the kids, saunas, wellness centres and a desire to dodge six-figure stamp duty payments are driving thousands of Melburnians to build $1m dream homes.

Nine municipalities now have average new build costs topping $1m, according to Australian Bureau of Statistics housing approvals data that shows the city’s priciest pocket is the City of Stonnington where the typical new home is worth a whopping $2.886m.

Even once relatively affordable neighbourhoods such as Monash and Moonee Valley have hit seven-figure construction costs, with building industry bosses revealing many families are bulldozing their own homes to get a dream new build — without paying another hit of stamp duty by relocating.

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Shockingly, the figures uncovered in analysis of the ABS data for the past financial year only cover the expected building cost.

Planning approvals, purchasing the property to build on and any additional costs such as land tax and stamp duty are added on top, meaning the end cost of a new home would be a multimillion-dollar sum in most instances.

However, builders have revealed many families in the most costly neighbourhoods to build a new home are bulldozing their own home and building new in a bid to get a house that suits their needs, without paying hundreds of thousands of dollars in stamp duty tax by moving.

A Marque Property Group that topped the $1m mark.

Inside the more than $1m build has plenty of style-centric features, but is also still guided by functionality and family-friendly use.

Marque Property Group’s David Borg caters to higher-end builds, typically north of $1.5m, in established Melbourne suburbs.

Mr Borg said while prices for materials such as concrete, timber frames and the copper needed for wiring was definitely up, top end homes were changing.

Additions such as mud rooms, basements for carparking, home saunas and wellness centres, as well as lifts, were becoming more and more common above $1.5m.

“And dog washes are getting more popular now, too, with a lot more ‘inside pets’ people are thinking about wanting that in their garage,” Mr Borg said.

Mr Borg said he was now also starting to see the $1m-plus builds appearing in places like Avondale Heights and Keilor.

Where Melbourne’s $1m-Plus Builds Are

Stonnington – $2.886m, up from $1.062m in 2015

Boroondara – $1.783m, up from $781,000 in 2015

Bayside – $1.753m, up from $787,000 in 2015

Yarra – $1.359m, up from $460,000 in 2015

Port Phillip – $1.315m, up from $621,000 in 2015

Mornington Peninsula – $1.102m, up from $400,000 in 2015

Glen Eira – $1.047m, up from $455,000 in 2015

Monash – $1.022m, up from $455,000 in 2015

Moonee Valley – $1.003m, up from $402,000 in 2015

Source: ABS Building Approvals, financial year 2025, 2015

There’s also a growing share of top-end home buyers looking to energy saving advancements as a way to future proof their home, he said.

When it comes to the $1m builds, Metricon chief executive Brad Duggan said the National Construction Code’s increase from six-star energy efficiency to seven-star energy efficiency minimum standards had added substantially to costs in the past year.

“But the main reason you are seeing prices rise is that Australians love real estate, and if they have money to spend they will spend it on real estate,” Mr Duggan said.

He noted a growing number of Victorians also looking at building new homes in place of their old one as a way to skip stamp duty bills and future-proof their lifestyle — ensuring they, and their children, can stay in communities they had built connections with long term.

Metricon’s Bayville design offers expansive living spaces for a more than $1m price point.

A Balwyn new home build by Metricon worth more than $1m shows what you can get for the sum.

“The majority of the spend will be on living rooms, larger bedrooms and multiple bathrooms,” he said.

“People are planning for their kids’ futures and to spend more time with them.”

Mr Duggan said many of the areas were having their build costs buoyed by families replacing their existing home, after buying the property at a more affordable price in the past.

“So you are seeing designer kitchens with butler’s pantries, a lot more benchspace or even two benches, and a lot of custom cabinetry,” Mr Duggan said.

Housing Industry Association Victorian executive director Keith Ryan agreed that rising build costs weren’t the only reason behind more $1m builds.

“Increases in home sizes and the average number of storeys for a home partly explain this outcome,” Mr Ryan said.

“But another important factor is the relative increase in the cost of high quality detached homes as opposed to the number of more affordable homes in these areas.”

Another of the Marque Property Group’s $1m+ builds in Melbourne.

Inside, the home features expansive entertainment space.

Across Melbourne, the cost of building has more than doubled in 22 municipalities in the past decade.

Victoria wide, the ABS data shows the cost of building a new house has surged almost $220,000 (75.3 per cent) from $291,300 in the 2015 financial year to $512,500 in the past 12 months.

Building material costs have risen about 56.4 per cent in the same period, according to the ABS’s Producer Price Index.

The remaining 20 per cent jump is potentially partly explained by a 10.7 per cent increase in the floorspace of homes in the same timeline, rising from 197sq m to 218sq m, according to Victorian Building Authority statistics.

And the share of double-storey builds has also risen, with the state’s average up from 1.34 storeys to 1.41 storeys in the same time line.

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Australia’s housing market is heating up just in time for spring, with national home prices climbing 0.5 per cent in August to reach a fresh record high.

This marks the eighth consecutive month of growth, setting the stage for what experts predict will be a blockbuster spring selling season.

Over the past year, home values have surged 5.3 per cent, adding an average $47,900 to the median property price.

The five-year growth story is even more staggering, with home values rocketing 50.4 per cent, underscoring the resilience of the Australian property market.

Capital city markets are leading the charge, with values rising 0.5 per cent in August and 4.9 per cent year-on-year.

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REA Group senior economist Eleanor Creagh said the housing market’s momentum is building at the perfect time for sellers.

“The spring selling season is shaping up to be a big one. Lower interest rates, increased borrowing capacities, and improved buyer sentiment are drawing more Australians back into the market,” she said.

“Demand has re-accelerated in Sydney and Melbourne, marking a sharp turnaround from the slower conditions we saw in late 2024.

“Darwin has also emerged as a surprise leader, with annual growth outpacing all other capitals.”

Source: PropTrack

The spring surge is expected to be fuelled by a combination of factors, including constrained housing supply, strong population growth, and the expansion of the Home Guarantee Scheme in October.

These elements are likely to keep upward pressure on prices, making now an opportune time for sellers to capitalise on the market’s strength.

“Spring is traditionally the busiest time of year for real estate, and with the market gaining momentum, we’re anticipating a wave of new listings and heightened buyer activity,” Creagh added.

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While some capitals like Adelaide and Perth are seeing growth normalise, others are poised for further gains.

Melbourne’s relative affordability and strong population growth are restoring its appeal, while Sydney continues to lead the charge in the nation’s property rebound.

Here’s what to expect across VIC, NSW, SA and QLD this spring.

VICTORIA

Melbourne homebuyers are gearing up for spring in the biggest numbers since the city’s Covid boom amid a rate cut bonanza that’s added almost $100,000 to budgets.

Cashed up first-home buyers, especially tradies, are expected to have one of their best cracks at a purchase in history, with mortgage brokers revealing there has been a surge in inquiries after the federal government announced they would guarantee loans for high earners from October.

If you’re lucky enough to have deep pockets or win the lottery this spring, this five-bedrrom house at 25 Wrixon St, Kew, is priced at $9m-$9.9m. The suburb in Melbourne’s inner east has a $2.62m median house price.

Families are also expected to try for some of the best homes suburbs have to offer, with falling interest rates raising confidence in the city’s property prospects luring back owners who had sat out the past three springs in response to sky-high mortgage costs.

Read the full story here.

QUEENSLAND

As the Southeast Queensland property market heads into spring selling season, buyers will have to be quick with properties selling in less than five days in some of the region’s most popular suburbs.

Market data from real estate software firm Reapit showed competition was already heating up with days on market falling in Queensland since interest rate cuts began in February.

The Reapit data revealed the Queensland average days on market was sitting at 49 in August 2024, 44 in February and 46 last month.

Anita Bocquee and Terry Brouwers have waited until spring to list their West Home for sale. Picture Lachie Millard

Across the state there were 78 suburbs with days on market sitting at or below 10 in August.

In SEQ, Sadliers Crossing in Ipswich recorded a zero days on market while Molendinar on the Gold Coast was sitting at three.

Deebing Heights, Lawnton and White Rock averaged four days on market, Marsden was at 4.5 and Glenore Grove, Northgate, Ooralea and West Woombye were at five.

Read the full story here.

NEW SOUTH WALES

Sydney is set to become an extreme “seller’s market” this spring as property investors and first-home buyers scramble for a dwindling supply of entry level homes.

Competition for home sales has already hit fever pitch in some areas, with an average of up to 150 serious buyers vying for every one home listed for sale, PropTrack figures showed.

Experts revealed the stage has now been set for a show down between property investors galvanised by lower interest rates and first-home buyers capitalising on government incentives.

Homeowners Kevin Fang and Ying Ying are selling their Lindfield home to upsize. Picture: Justin Lloyd.

They’re expected to be targeting the same properties, putting high pressure on home seekers wanting the most affordable properties,while sellers will be able to call the shots.

Properties in the more affordable Blacktown region have received the highest numbers of key inquiries in recent months, with data from PropTrack revealing that homes in Werrington and St Marys were Sydney’s most competitive.

In Werrington, houses received 150 “key inquiries” on average.

Read more here.

SOUTH AUSTRALIA

SA’s real estate agents are gearing up for a bumper Spring, reporting huge demand from househunters and strong numbers of properties in the pipeline.

Buoyed by a recent interest rate cut, the fact that home prices have been holding strong since the pandemic and continue to rise in many suburbs, and the fact that the state is still gripped by a chronic shortage of properties for sale, agents are tipping one of the biggest springs in years.

According to PropTrack data, there are 121 properties scheduled to go to auction across the state by the end of the weekend.

Lindsay and Rosemary Burgess are selling their Pooraka home which they have owned for 62 years. Picture: Tim Joy.

Next week there are even more, with 132 set to hit the auction block.

Kate Smith of Kate Smith property said she was gearing up for a big spring, and said buyers were more prepared than ever.

“People are prepared with their finance and good to go from the first open, ready to submit offers on the spot because they know that if they don’t get it there’s not a whole lot of other options at the moment,” she said.

Read the full story here.

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Investors who fund most home loans are no longer wondering whether the Federal Reserve will cut rates this month, but by how much. At least three quarter-percentage point rate cuts are now expected this year.

A growing number of U.S. housing markets face elevated risks from high foreclosure rates, underwater mortgages and rising costs, according to a new report.

ATTOM analyzed 579 counties nationwide for its second-quarter Housing Risk Report — with ranking criteria including affordability, foreclosure activity, mortgage equity and unemployment.

California and Florida counties were heavily represented among the nation’s most vulnerable markets.

Of the 50 riskiest counties, 14 were in California and seven were in Florida. New Jersey had five and Louisiana had four.

The five counties ranked as most at risk were Charlotte County, Fla.; Humboldt County, Calif.; Shasta County, Calif/; Butte County, Calif.; and Cumberland County, New Jersey.

Each had foreclosure ratios of at least one in every 766 homes and unemployment rates above June’s national average of 4.36%.

“This summer’s home prices were certainly eye-catching, but there are many factors that contribute to the health of a local housing market,” said Rob Barber, CEO of ATTOM. “Our index takes into account key indicators beyond just sales price to create a barometer that helps folks better understand where their market is headed.

“There’s uncertainty about how long prices can keep going up, and what will happen with the broader economy. That can be scary for owners and prospective buyers who don’t always get a full view of their market.”

Affordability pressures

Nationwide, homeownership expenses — including mortgage payments and property costs — consumed an average of 33.7% of annual wages during the second quarter.

But in some counties, costs exceeded what a typical worker could cover in a year.

In Marin County, Calif., ownership expenses equaled nearly 120% of annual wages. Santa Cruz County, Calif,, and Maui County, Hawaii, also required more than 110%.

Kings County, New York, and San Luis Obispo County, Calif., rounded out the top five least affordable markets.

In 111 counties, or about 19% of those studied, at least half of local wages would have been needed for home expenses. In nearly two-thirds of counties, ownership costs consumed at least a third of income.

Underwater mortgages, foreclosures

Nationally, 2.7% of homes were “seriously underwater,” meaning loan balances exceeded property values by at least 25%.

In 223 counties, the rate was higher than the national average.

Seven of the 10 counties with the highest underwater mortgage rates were in Louisiana. Rapides Parish led with 17.3% of homes seriously underwater — followed by Calcasieu Parish at 16.9%.

Foreclosures also weighed heavily in several markets.

One in every 1,413 homes nationwide faced foreclosure during the quarter. The highest rates were in Dorchester County, S.C. (one in 355 homes), Charlotte County, Fla. (one in 372), and Oswego County, New York (one in 427).

About 35% of counties analyzed had unemployment rates above the national average in June.

Imperial County, Calif., had the highest rate at 19%, followed by Yuma County, Ariz., at 15.2%.

Regional divides

Southern counties appeared frequently on both ends of the index.

Of the least risky counties, 18 were in the South and 18 in the Northeast. New York had eight counties on the low-risk list, while Wisconsin had seven.

Among the most stable markets were Chautauqua County, New York, where home expenses accounted for just 17.8% of wages, and Potter County, Texas, at 19.6%.

None of the 50 lowest-risk counties had unemployment rates above the national average. Several — including Cumberland County, Maine, and Chittenden County, Vt. — reported rates near or below 2.5%.

McGrath, Geelong agent Tom Harrison road tests the indoor basketball area in the garage at 9-11 Mosman Way, Highton. Picture: Alan Barber

Enormous multi-car garages are cementing themselves as a favourite accessory for prestige buyers across urban Geelong.

Luxury car enthusiasts are among those driving demand for extra vehicle storage and elaborate workshops to display their motoring treasures.

Whitford, Newtown agent Heidi Trempel said older children staying at home longer was also fuelling the popularity of properties with garaging for two-plus cars or the space to build one.

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“Geelong people are obsessed with garages,” Ms Trempel said.

“With growing families and kids at home longer, they are all ending up with cars and then they can’t park them anywhere.

“But sometimes it’s not just cars, sometimes people want to use them for gym rooms with the soft floor … we have one in Villamanta St and that’s being looked at by people who are interested in things like woodwork, hobbies, car enthusiasts, caravaners and boating people.”

A passion for cars led vendors of one luxury Newtown home to incorporate a purpose-built six-car basement garage into their design.

A six-car basement garage has drawn buyers to 10 Mercer Pde, Newtown.

Builders of 29 The Esplanade, North Shore, went all out on this luxury vehicle display.

Going underground doesn’t come cheap, but it’s now become one of the biggest attractions of the $4.4m listing at 10 Mercer Pde, particularly among buyers who are already paying to store their luxury car collections off site.

“The bonus of that car accommodation is because obviously the higher value properties often attract people who potentially have more cars,” Ms Trempel said.

She ranks garages among the top three items on Geelong buyers’ wishlists and said, while difficult to quantify, they certainly boosted a property’s value.

“If someone says to me ‘we have got a garage but we’re going to convert it, should we do that?’ my immediate reaction is don’t,” she said.

9-11 Mosman Way, Highton, listed for $1.65m to $1.725m, has a six-car garage with an indoor basketball zone.

The five-car garage with rear access is also proving a popular feature of 43 Villamanta St, Geelong West, which is on the market for $1.2m to $1.3m.

McGrath, Geelong agent Tom Harrison said buyers were specifically seeking out one of his premium listings at 9-11 Mosman Way, Highton, because of its six-car garage.

With so such much parking space, the vendors have converted part of the garage into an indoor basketball zone.

“People just want a bit more space,” Mr Harrison said.

“I have had someone not even into cars who is living in a townhouse at the moment and he wants to find something with a four to six-car garage.”

The multi-car garage at 8 Cygnet Court, Lara, featured exposed timber rafters and was key to the $890,000 sale.

Jellis Craig Geelong agent Rena Maniatakis recently had multiple offers on 700sq m Lara property with a 4.5-car garage, which went under contract after the first open home.

“It’s a big main attraction, especially for men,” Ms Maniatakis said.

“People want either a four-car garage and that is also why corner blocks sell so well, because you can get a garage out the back through the other side.”

But Geelong real estate advocate Tony Slack said while off-street parking was a priority, many young families still preferred backyard space over big garages.

“Properties that tick all the boxes, including a four-car garage, are a rarity but having said that they will have some appeal to the right buyer who is prepared to pay for the privilege,” he said.

“It comes at a cost, either a trade off in another area or a financial cost.”

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