01 · The Big Picture
Building Is Getting More Expensive. Buying Is Getting Harder. Renting Is Getting More Competitive.
Our data covers six areas of government regulation that directly shape the property market. At the end of 2025, the picture is clear: the cost of building new homes is the highest it has been in fifteen years of measurement. At the same time, the ability of ordinary buyers to get a loan is the most restricted it has been in fifteen years. And because fewer people can buy and fewer social homes are available, more people are competing for the same private rental properties.
Each area gets a score based on how far current conditions are from the 15-year average — above average means more constraint than usual, below average means less. Here is where each area sits:
Chart 1 · Where Each Area Sits Right Now — Above or Below the 15-Year Average
| Policy Area | Direction | Plain-English Summary |
|---|
| Building Compliance Costs |
Rising ↑ |
New homes must meet higher energy and liveability standards than ever before. The cost of meeting those standards is now 3.42% above the pre-2016 baseline — the highest on record. This is baked into the price of every new home built to current code. |
| Rental Regulations |
Rising ↑ |
Victoria, NSW and Queensland have all progressively tightened rental laws since 2018. No state has reversed any of these changes. Landlords are operating under more rules than at any point in the 15-year measurement period. |
| Planning Approvals |
Stable → |
The mix of what gets approved — houses versus apartments — is back near its historical average after the HomeBuilder distortion. But getting approval doesn't mean getting built: compliance costs can make approved projects financially unviable. |
| Stamp Duty |
Stable → |
The stamp duty burden as a share of property values is near its long-run average. No major national reform has occurred. NSW First Home Buyer Choice is the most notable change — allowing some buyers to choose an annual levy instead. |
| Borrowing Restrictions |
Constrained ↓ |
APRA requires banks to test whether borrowers could afford repayments at 3 percentage points above the actual rate. This has been in place for 17 consecutive quarters. Many financially capable buyers are still failing serviceability tests. |
| Social Housing |
Declining ↓ |
Social housing has grown 7% since 2011, but total housing has grown 26%. As a share of the market, government-provided housing is at its lowest point in 15 years — meaning more people are relying entirely on the private rental market. |
02 · For Agents & Property Managers
What This Means on the Ground
These six regulatory signals combine to create the market conditions you are working in every day. Here is the practical translation:
For Sales Agents
Buyer capacity is genuinely constrained — it's not just confidence
- APRA's serviceability buffer means many buyers who can comfortably service a loan at current rates are still failing the stress test. This is a structural constraint, not a temporary confidence issue.
- New dwellings carry a compliance cost premium embedded in their floor price. First home buyers looking at new builds face both restricted borrowing and elevated entry prices simultaneously.
- Stamp duty levels are near their long-run average — not a particular drag or relief at present.
For Property Managers
Rental demand is structurally elevated — and landlord compliance is rising
- Two forces are pushing people into rental simultaneously: borrowing restrictions stopping buyers from purchasing, and declining social housing availability pushing lower-income tenants into the private market.
- Tenancy law compliance obligations have been tightened progressively in VIC, NSW and QLD since 2018 and show no sign of reversing. Smaller landlords are increasingly exiting — consolidating the market toward larger, professionally managed portfolios.
- Vacancy rates and rental competition should be understood as structural, not cyclical.
For Developers & Builders
Compliance costs are real and rising — stress-test your numbers
- NCC 2022 requirements have added the largest compliance cost increment ever recorded. For projects in fully adopting states, the 3.42% cost premium above pre-2016 baselines must be modelled into feasibility assessments.
- Planning approvals are near historical averages — but a project that was viable under pre-2022 cost assumptions may no longer stack up. Residual land value calculations need to be re-run against current compliance costs.
- NSW and WA have maintained opt-outs from some requirements — check jurisdiction-specific obligations carefully.
For Investors
The market is concentrating — scale matters more than it used to
- Rising tenancy compliance costs favour larger operators who can absorb administrative overhead efficiently. Smaller landlords face the same obligations without the scale to manage them cost-effectively.
- Borrowing restrictions create a sustained pool of would-be buyers who remain renters — supporting rental demand in well-located properties.
- New build investment carries the NCC 2022 compliance premium in its floor price — but that same premium raises barriers to new supply, supporting the value of existing compliant stock.
03 · The Rental Market
Why Rental Competition Is a Structural Condition, Not a Temporary Phase
Chart 2 · Social Housing Share of All Dwellings — 15 Years of Structural Decline
Social housing in Australia grew by about 30,000 dwellings between 2011 and 2024. In the same period, total housing stock grew by more than 1.8 million dwellings. As a result, the share of housing under government management has fallen from around 5% to around 4.3% — its lowest level in 15 years of our measurement.
At the same time, borrowing restrictions mean a significant cohort of people who could afford rental but cannot meet bank stress tests are being kept out of home ownership. Both pressures are structural — driven by government policy settings, not by temporary economic conditions.
What This Means for Rental Markets
Rental demand is being driven from two directions at once: people who want to buy but can't get finance, and people who need social housing but can't access it. This is not a story that changes quickly — it is embedded in policy settings that have been in place for years.
04 · Building Costs
Why New Homes Cost More to Build Than They Used To
3.42%
Current compliance cost premium above pre-2016 baseline for NCC 2022 standard
7★
Minimum NatHERS energy rating now required under NCC 2022 (was 6★ under NCC 2019)
~$6,000
Government estimate of added cost per dwelling for NCC 2022 compliance (industry estimates are higher)
The 2022 National Construction Code introduced higher energy and liveability standards — including a seven-star energy rating requirement and whole-of-home energy budgets. These are worthwhile long-term objectives, but they come with an upfront cost premium that is now the highest it has been in our 15-year measurement period.
Importantly, not every state has adopted the full package. NSW has opted out of the Liveable Housing Design Standard (accessible housing requirements) and is using its own framework. Western Australia has deferred the mandatory adoption of some provisions. This means the compliance picture varies by state — developers and builders working across jurisdictions need to know exactly which standards apply where.
Chart 3 · Building Compliance Cost Premium — How It Has Stepped Up Over 15 Years
05 · What to Watch
Key Developments That Will Affect the Market in 2026
Watch — Lending
New APRA lending cap from February 2026
From February 2026, APRA capped the share of new loans that can go to borrowers with high debt-to-income ratios. This is on top of the existing serviceability buffer. Watch how lenders respond — some may tighten assessment criteria further, others may adjust product offerings.
Watch — Supply
Housing Australia Future Fund deliveries
The Federal Government's $10 billion Housing Australia Future Fund is expected to start delivering new social and affordable homes from 2025–26. This is the first meaningful policy response to the 15-year social housing decline. Watch for any visible uptick in social housing stock in the next AIHW annual data release.
Watch — Building Costs
NCC 2025 residential provisions — paused but not resolved
Further NCC 2025 residential requirements were paused before taking effect. This pause is temporary — monitor ABCB announcements for when and whether these provisions will be reinstated. If they proceed, construction costs will step up again from their current 15-year high.
Watch — Rental
Further tenancy reforms in QLD and VIC
Both Queensland and Victoria have additional tenancy reforms in their parliamentary pipelines. No state has reversed any previously passed tenancy legislation. If additional reforms pass, the compliance burden for landlords in those states increases further — accelerating the consolidation trend already underway.
APN EL 3 · Practitioner · A-260416-C21300S1.3
Findings are presented on the basis of data and evidence alone.