If you’re a first home buyer weighing up whether to start now or hold off for a better moment, the picture has shifted from where it was six or twelve months ago.
What the latest construction data is telling us
The ABS release for the December 2025 quarter puts Australia-wide house construction prices 2.3% higher than a year ago. Victoria sits at 0.7% over the year, with the quarterly rise of 1.0% suggesting momentum is building again. The drivers are familiar: skilled trade shortages, ongoing competition from public sector infrastructure for concrete and labour, and annual wage reviews flowing through into build costs.
A 2% annual rise is gentle as headline numbers go. The direction is what makes it worth paying attention to. For the better part of two years, builders were cutting margins and running bonus incentives to keep pipelines full. That competitive softness is fading. When builders stop needing to discount, the quote you’re looking at today is less likely to be there in three months.
Source: ABS Producer Price Indexes, Australia, December 2025.
What this means for your borrowing and your budget
Rising build prices hit first home buyers in a particular way. Your pre-approval is a fixed number. The home you want is a moving target. When construction prices climb 2% over a year, the size, design, or location you could afford at the start of that year quietly narrows by the end.
A 2% rise on a $450,000 build works out to around $9,000. That might be the difference between the four-bedroom floorplan and the three. It might mean dropping the upgraded kitchen, or choosing a smaller block further out the growth corridor. The way first home buyers get priced out is gradual rather than dramatic. A quote goes up. The bank doesn’t move to match. Something has to give, and it’s almost always the thing you were most excited about.
What a fixed contract price actually changes
Once you’ve signed a contract with us, the build price is locked. If materials jump next quarter or labour costs climb again, that’s our job to manage, not yours. You budget against a real number, not a moving estimate. For a first home buyer with a deposit that took years to save, that level of certainty matters more than people realise until they’re the ones watching their borrowing capacity get squeezed from the other direction.
Site costs deserve a straight answer. On many blocks we can fix site costs at contract, and that’s a big part of why people choose to build with us. On some blocks, particularly those with steeper slopes, unknown soil conditions, or services that haven’t been located, there are provisional items we can only finalise once further testing is done. Where we can lock them in, we do. Where we can’t, we walk you through exactly what’s provisional and why, so there are no surprises later.
On top of the contract price, we run inclusions and offers through the year. These change, so rather than list them here, have a look at our current promotions page for what’s running right now. Timing your build around a live offer is one of the simplest ways to stretch a first home budget further than the base numbers suggest.
But should I wait for prices to drop?
We hear this question most weeks, and it’s a reasonable one to ask. A meaningful fall in construction prices would need several things to happen at once: labour shortages easing, public infrastructure demand cooling, and material costs dropping. None of those look likely in the next twelve to eighteen months. The Big Build pipeline across Victoria is still pulling trades. Steel, concrete, and energy costs aren’t on a downward track.
“Is now the right time?” is a better question than “is the market right?” Market timing rarely helps a first home buyer, because you’re not trying to flip something for a profit. You’re trying to get into a home. What helps is knowing your borrowing number, having a block sorted (or a clear plan for one), and working with a builder who can commit to a fixed contract price. If those pieces are in place, now is the right time. If they aren’t, the work is getting them in place, not waiting for a market signal that may not come.
On interest rates, yes, a rate cut would lift your borrowing capacity. But if build prices keep climbing at 2% or more a year while you wait for rates to move, the benefit of the rate cut gets partly eaten by the price rise. Waiting for the perfect alignment of low rates and low prices tends to mean waiting forever.
Three things worth sorting before you start
A few things make the biggest difference when you’re building your first home.
Get pre-approval early, and get it properly. Not a rough online estimate, a formal pre-approval from a broker or lender who has seen your payslips and statements. It tells you the actual number you’re working with, which lets you have a real conversation about what’s possible.
Think carefully about your design before chasing a lower price per square metre. A simple, rectangular single-storey footprint will almost always cost less per square metre than a double-storey plan with cantilevered rooms or big voids. If the budget is tight, design efficiency is where the savings live, not in cutting back on inclusions you’ll notice every day for the next twenty years.
Understand the difference between standard inclusions and upgrades before you sit down at a selections appointment. A $280,000 quote with basic inclusions can easily land at the same final price as a $310,000 quote with premium inclusions by the time both homes are finished. We publish our Premium Inclusions list so you can see what’s in the base price and make informed calls on what to upgrade and what to leave standard.
Ready when you are
If you’re in the early stages of thinking about your first build, the best step is a conversation. We can walk you through current designs, talk through your block (or help you find one), show you what today’s contract pricing looks like for the home you have in mind, and point out which of our current offers line up with your plans.
Have a look at our promotions page for what’s running this month, or book a consultation with our team. We’d rather have an honest conversation about your pre-approval and your timeline than rush anyone into a decision they aren’t ready for.
