Analysis by Money.com.au of the latest ABS Lending Indicators reveals the ACT leads this trend with the most significant cost advantage for new builds.
Homebuyers in the ACT are borrowing 20 per cent less for new homes compared to established properties, with average loans of $525,991 versus $658,491.
Tasmania shows the second-largest gap, with new home mortgages averaging 12.5 percent lower than those for existing properties.
South Australia follows with a 6.6 percent difference, while Western Australia and New South Wales complete the list with new home loans 3.8 per cent and 0.30 per cent lower respectively.
Money.com.au’s Property Expert, Mansour Soltani, said this trend is due to regional land affordability and government incentives.
“Building a home can be a cheaper option in states where land is more affordable, particularly in growing regional markets,” Mr Soltani said.
“In contrast, established properties in high-demand metro areas come with premium price tags, pushing up loan sizes.”
Government support programs are making a significant impact on the financial equation for many buyers considering new construction.
“Government incentives for new builds like stamp duty concessions, first-home buyer grants, and low-deposit schemes can make new homes the more cost-effective choice for buyers in certain regions,” Mr Soltani said.
The picture looks different in other parts of Australia, however, with some states showing a “new build premium.”
The Northern Territory has the highest premium, with new home loans averaging 6.4 percent more than those for existing properties.
Queensland follows with new home mortgages 3.6 per cent higher on average, at $660,910 compared to $637,835 for established homes.
Victoria completes this group with a modest 1.8 per cent premium for new builds.
For prospective homebuyers, these findings suggest that building a new home in certain locations could result in taking on less debt and paying less interest over the life of their loan.
The data indicates that regional areas and outer suburbs where land remains competitively priced may offer the best financial opportunities for those considering new construction.
First-home buyers in particular may benefit from exploring new build options in states where the data shows favourable mortgage trends, especially when combined with available government incentives.
“With government and developer incentives available for new builds and residential land still competitively priced in some outer suburbs and regional areas, building new remains a viable and cost-effective option, though location is key,” Mr Soltani said.
