Why Now Can Be a Good Time to Buy a Quality New Home in Sydney
Updated: Sep 22
An established home may look cheaper because the purchase price is lower.
But if it needs a new kitchen, bathrooms, structural work or a major redesign, that saving can disappear very quickly.
Construction costs remain materially higher than they were five years ago. So before dismissing a new or near-new home as “too expensive”, I would compare the premium with what it would genuinely cost to bring the older property to the same standard.
And right now, there is another reason I think buyers should be paying attention to quality new stock.
The market has changed the developer’s position
Developers do not make money by holding completed stock indefinitely.
Once a project is finished, unsold homes continue to tie up capital. Depending on the project and ownership structure, the developer may still be carrying finance costs, rates, land-related taxes and charges, strata or maintenance expenses, marketing costs and pressure from lenders or equity partners.
In a strong market, a developer may be willing to wait for the next buyer.
In a softer market, that calculation can change.
ASIC has specifically identified pressure in property development arising from cost escalation, project delays, soft presales, unsold stock and weaker refinancing conditions.
We are also seeing developers use meaningful incentives to move stock. Recent reporting has identified new-home incentives worth more than $100,000 in some projects as developers compete for buyers.
That does not mean every developer is distressed.
It does mean that for some completed projects, certainty and cash flow may become more important than holding out for the maximum theoretical price.
That can create opportunity for a prepared buyer.
This is where new homes become interesting
Normally, the buyer looks at a new home and thinks:
“Why would I pay another $150,000 or $200,000 when I can buy the older one?”
My question would be:
What does the older one cost after you make it the home you actually want?
If the established property needs $250,000 or $300,000 of work—and that work still carries cost, timing and execution risk—the more expensive completed property may suddenly look very different.
Then add the current market.
If a developer has completed stock, wants to reduce debt or release capital and is prepared to negotiate meaningfully, the premium that existed six or twelve months ago may no longer be the same.
That is where I think buyers need to look carefully.
You may be buying at today’s softer sale price, while avoiding tomorrow’s construction cost.
A developer’s asking price is not the same as their position
This is also where buying new property requires some understanding of the transaction—not just looking at the advertised price.
A developer may have:
multiple completed properties still to sell;
finance milestones to meet;
capital tied up in the project;
another acquisition or development requiring funding;
lenders seeking debt reduction;
ongoing holding expenses; or
a financial reporting period or project completion target influencing timing.
None of these automatically means the developer will discount.
But they may influence what matters in the transaction.
Sometimes the developer may prefer a clean, certain buyer today over waiting months for a theoretically higher price.
That is why I would not assume the advertised price represents the final buying position.
Equally, I would not assume a large discount means good value. The property still has to stand up against comparable sales, location, quality and future resale demand.
Could a developer sell close to cost?
It can happen in individual transactions, particularly where releasing capital becomes more important than maintaining the original project margin.
But buyers should be careful with the phrase “below cost”.
A developer’s true cost base may include land, construction, consultants, finance, contributions, taxes, marketing and overheads. Unless you have reliable information, you usually cannot know the exact figure from the outside.
The more useful question is:
Has the seller’s motivation created a price that is attractive relative to the market and to the cost of the alternatives?
That is something a buyer can actually assess.
This opportunity is strongest in completed stock
I am much more interested in this argument when discussing a completed new or near-new property.
With an off-the-plan purchase, the buyer still carries completion, timing and finished-product risk. NSW Government guidance specifically warns that off-the-plan properties may be completed later than expected, differ from expectations or be worth less than the agreed price by settlement.
With completed stock, you can inspect what you are buying.
You can assess:
the actual finish;
floor plan;
light and outlook;
defects;
landscaping;
access;
surrounding development; and
the building or estate as it exists today.
You are negotiating on a finished asset, not a promise.
That distinction matters.
New does not automatically mean good
I am not suggesting buyers should simply buy new.
Some new homes are poorly located, compromised in design or overpriced. Building defects still need to be investigated. A glossy kitchen does not fix a poor floor plan or inferior position.
And some established homes are excellent purchases because the land, location or existing improvements justify the work required.
The point is to make the comparison properly.
For the older property:
Purchase price + realistic renovation cost + contingency + time + disruption
For the newer property:
Purchase price + any premium + due diligence on quality
Then assess which delivers the better outcome.
Why I think this is a market worth watching
Right now, we have an unusual combination:
construction and renovation costs remain elevated;
some established homes still require significant work;
buyer demand has softened in parts of Sydney;
developers can be carrying expensive completed inventory; and
some sellers are therefore more motivated to transact than they were in a stronger market.
That combination will not exist equally across every suburb or every development.
But where it does, I think buyers should pay attention.
A quality completed new home purchased from a motivated developer at the right price can be a very different proposition from paying a premium for new stock in a booming market.
This is not necessarily the time to buy any new home.
It may be a very good time to negotiate on the right one.
My takeaway
Before calling a new home expensive, price the alternative properly.
And before assuming a developer will not negotiate, understand their position.
In the current market, the opportunity may be on both sides of the equation:
renovating the old home has become more expensive, while some developers have become more motivated to sell the new one.
That is the gap I would be looking for.
This article provides general property commentary only and does not constitute legal, financial, tax, lending, building or formal valuation advice.
