Weekly Market Brief: Buyers Gain Ground, But Australia Still Can’t Build Enough Homes

Australia’s housing market is sending two very different signals. Buyer demand has softened, borrowing remains expensive and Canberra auction conditions are giving purchasers more negotiating power. At the same time, Australia is still not building enough homes to keep pace with its long-term housing needs.

Reuters reported on 12 August that completed home construction is running 27% below the average quarterly pace required to meet the National Housing Accord target of 1.2 million homes by 2029. Industry forecasts suggest Australia could miss that target by around 15%.

The short-term market may favour buyers, but the longer-term supply challenge has not gone away.

Australia is not building fast enough

Delivering 1.2 million homes over five years requires roughly 60,000 completed dwellings each quarter. Current construction is running well below that pace.

The issue goes beyond planning approvals. Skilled labour remains constrained, construction costs are elevated, project finance is difficult and approval pathways can be slow. Even after approval is secured, a project still needs to stack up financially before construction begins.

Reuters reported that almost 70% of apartments approved nationally since 2020 had not progressed to building.

That distinction matters. An approval is not a home.

Approval does not equal delivery

This is particularly relevant in Canberra following planning reforms designed to allow more duplexes, triplexes, terraces, townhouses and low-rise apartments across RZ1 and RZ2 areas.

Greater planning flexibility can create opportunities for additional housing, but zoning alone cannot guarantee delivery. Projects still need viable construction costs, available trades, finance, infrastructure, market demand, a workable approval pathway and sufficient commercial viability.

If those factors do not align, additional development capacity can remain theoretical.

The national figures reinforce a straightforward point, housing supply is not only a planning challenge, it is a delivery challenge.

Building is taking longer

The time required to deliver new housing has also increased.

Reuters reported that completing a new Australian apartment now takes around 33 months, compared with 21 months a decade ago. Detached houses take approximately 11.5 months, up from 8.6 months.

That creates an unavoidable lag. Population and migration can change quickly, interest rates can move within weeks and buyer confidence can shift rapidly. Housing supply cannot respond at the same speed.

It is one reason a property market can experience short-term weakness while still carrying a structural housing shortage underneath.

The RBA is not giving buyers an all-clear

The Reserve Bank held the cash rate at 4.35% on 11 August for the second consecutive meeting, avoiding another immediate increase in mortgage repayments.

However, the RBA’s message remained cautious. Governor Michele Bullock said another rate increase remained possible if inflation proved more persistent, with inflation still expected to remain above the 2% to 3% target band until the second half of 2027.

For Canberra buyers, the practical issue is borrowing capacity and repayments. Interest rates directly affect what households can comfortably afford, regardless of what happens to headline property prices.

Canberra buyers have more negotiating power

Canberra auction conditions continue to favour buyers, with the latest reported clearance rate sitting around 43%.

That does not mean auctions have stopped working. It means buyers and sellers are finding it harder to agree on value.

Buyers generally have more choice, more time to assess their options and less pressure to stretch simply because an auction deadline exists. For sellers, getting the campaign strategy right from the start becomes increasingly important.

A well-positioned property can still create competition. A property launched above the available market evidence can lose momentum quickly.

Short-term weakness does not solve affordability

Lower property prices do not automatically make housing more affordable.

A buyer purchasing at a lower price but a significantly higher interest rate can still face larger monthly repayments than someone who bought at a higher price when borrowing was cheaper.

There is another complication. Weaker buyer demand can discourage developers from commencing projects because expected selling prices become less certain.

That can create a difficult cycle. Prices soften, development activity slows and supply falls further behind. When borrowing conditions eventually improve and buyers return, insufficient new housing can place renewed pressure on prices.

What it means for Canberra buyers

Current conditions give buyers useful negotiating room. There is generally more opportunity to compare properties, review contracts, consider recent sales and make decisions without the same level of urgency seen in stronger markets.

But buyers should not assume every property will become materially cheaper. Well-located and well-presented homes can still attract competition, particularly where comparable supply is limited.

Finance preparation remains important, as does understanding the full cost of ownership. The maximum amount a lender is prepared to provide does not necessarily need to become the amount a household spends.

What it means for Canberra sellers

For sellers, the current ACT market rewards realistic positioning and close attention to buyer behaviour.

The strongest active buyers will generally see a new listing early. If those buyers consistently reject the property at its current price, additional time on market does not automatically improve the outcome.

Quality of enquiry, inspection attendance, repeat inspections, comparable sales, competing listings, price feedback, offers and days on market should all inform campaign decisions.

Hayman Partners’ sales approach similarly emphasises transparent market data, realistic pricing and adapting campaign strategy to current conditions.

Presentation matters more when buyers have choice

A buyer-friendly market does not make property marketing less important. It makes strong presentation more valuable.

When buyers have alternatives, average listings are easier to overlook. Photography, styling, video, floorplans and clear campaign copy help buyers understand why a property deserves their attention.

But presentation and pricing need to work together. Strong marketing cannot permanently compensate for an unrealistic price expectation, just as appropriate pricing cannot deliver its full potential if the campaign fails to communicate the property’s value.

This aligns with Hayman Partners’ focus on market knowledge, personal attention and delivering contemporary, tailored property services.

Final thought

Right now, Canberra buyers have more leverage and sellers need to be realistic about market conditions. Borrowing remains restrictive and auction results point to a market where buyers can afford to be selective.

Underneath that short-term picture, however, sits a much bigger structural issue. Australia is still not building housing quickly enough.

For buyers, softer conditions can create opportunity. For sellers, positioning and presentation matter. For policymakers, increasing zoning capacity is only part of the equation.

Because an approved home that never gets built does nothing for housing supply.