Over the weekend, the Coalition unveiled its plan to allow first-home buyers access to tax-deductible interest payments on their first home — if they buy a newly built property.

“In the South Australian example, we’re building homes at that affordable entry level of the market, somewhere between $500 and $600,000,” O’Neil said on Sunday morning.

Housing Minister Clare O’Neil said the commonwealth will expedite the build of new homes and address the underlying supply issue. Source: AAP / Mick Tsikas

Sam said he preferred Labor’s proposal for 100,000 new homes because adding to supply might bring prices down.

“Plus it feels irresponsible to go that way with one’s life savings [considering] the current trend in new build standards — look at the incident in Mascot a few years ago with that whole apartment block,” he said about the Mascot Towers complex in Sydney that is now uninhabitable due to serious cracks that appeared in 2019.

It raises the question, will the housing proposals appeal to the entry-level buyers it’s targeting?

Are we building the right homes?

“And you can’t sell a flat in the inner city or middle suburbs and buy a townhouse or three-bedroom on a comparable income. You have to be moving further out.”

He suggested the best way to address housing choice is for state governments to unlock the planning laws that restrict building medium-density housing in these areas.

Proptrack said several factors contributed to the trend, including the more affordable price of new builds, lower initial maintenance costs, the ability to tailor the home to buyers’ specific needs, access to the latest technology and energy efficiency.

Quality homes can restore consumer confidence

Davies acknowledged the hesitation this has created in the new-build market.

Defects in apartment buildings across the country have contributed to a crisis in confidence among first-home buyers. Source: Getty / Andrew Merry

“There is a certain amount of hesitation amongst buyers for buying off-the-plan because of building defects, but also because of changes the developers can make,” Davies said, referring to changes made during construction that were not included in original plans.

Bowes added that both the NSW and Victorian governments had taken “really positive” steps to improve building regulations and ensure quality builds.

The Victorian changes mirror those made in NSW in 2023, to give inspectors the ability to stop construction while defects are investigated; a similar security scheme to use as insurance in case of building issues; and powers to immediately suspend building certifiers and practitioners.

Can Australia build enough homes?

“They were building homes for sale at cost price, and that was one of the key reasons why we saw a very rapid increase in the home ownership rate in Australia … in the 50s and 60s in particular,” Pawson said.

More recently, a construction boost between 2015 and 2019 saw over one million residential units and houses built. This peaked in 2018 with the construction of 219,285 dwellings according to the ABS.