New build loans nosedive to historic low

Home loans issued for new builds have plunged to a near 20-year low – a symptom of Australia’s shortage of new housing, new data shows.

The analysis of ABS lending data found that lenders issued just 3783 loans for newly erected dwellings in the March 2025 quarter – the lowest quarterly figure since September 2006.

This includes loans for off-the-plan properties, dwellings converted for residential use, and new houses built to sell.

The current figures mark a 13 per cent drop from March 2024, which was the previous low point of the decade.

By comparison, 61,641 loans were issued for existing dwellings in the March 2025 quarter, up 6 per cent from March 2024.

Annually there were 271,127 loans issued for existing dwellings.

Money.com.au’s General Manager of Lending, Jacob Overs, says the drop in new dwelling loans is symptomatic of a deeper supply issue, with fewer housing developments making it to market.

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Home loans issued for new builds have plunged to a near 20-year low, new data shows.

“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,” he said.

With new builds taking longer to make it to market, there are fewer loans to be written for those entry-point properties.

“There’s a huge missed opportunity here, especially for first home buyers. 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.”

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Australia desperately needs more houses.

Mr Overs said the lack of new housing supply, impacted first-home buyers in more ways then one.

“We’re hearing from first home buyers who’ve saved their 5 per cent deposit and want to use the government incentives tied to new builds, but they can’t find any available stock. It’s the same story in pretty much every state,” he said.

“As a result, many are relying on their parents as guarantors to buy older, established homes instead or they’re having to take out a larger loan just to get into the market.

“It’s often not their first choice, but the timelines and uncertainty around new developments leave them in limbo and the cost of waiting for a new build just to qualify for incentives is going to hurt their long-term affordability.”

New dwelling loans peaked at 8510 in the December 2020 quarter, meaning current figures are now 56 per cent below that level.

The latest annual figures show the fall in new home loans is part of a broader trend.

In the year to March 2025, only 19,153 new dwelling loans were issued – the lowest since 2013.

Compared to the peak of 32,964 loans for new builds in the year to September 2021, that’s a 42 per cent drop.

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