The Real Driver of Property Growth Is The Supply

Most property headlines focus on prices going up or down month to month. That is not where the real story is. The real story is how many new homes are actually being built, and whether that number is keeping pace with how many people need somewhere to live.

Right now, it isn't and state governments across the country know it. Over the past year, several have introduced planning reforms specifically designed to speed up the delivery of new housing. For investors, this matters more than any single quarter of price data, because supply constraint is the mechanism that drives long-term value. When new housing takes years to catch up to demand, the properties that already exist, or that are already under construction, become more valuable in the meantime.

Perth: Making Room for More Homes

Western Australia has proposed changes to its design code that would cut the minimum block size required for subdivision from 900 square metres to 700 square metres. The state government estimates this could open up more than 50,000 Perth properties to redevelopment into smaller lots.

That is a meaningful number, but the changes are not expected to come into effect until mid-2027. This is the pattern investors need to understand. Policy fixes for undersupply take years to move from announcement to actual new dwellings on the ground. Anyone buying off-the-plan today is settling well before that new supply arrives, which means the scarcity driving the market now is the same scarcity they would be buying into.

That scarcity is already visible in the numbers. Cotality's latest data has Perth dwelling values at a record high, up 23.9 per cent over the past year and 2.0 per cent over the past quarter alone. Perth is currently the only major capital where price growth is still gaining momentum month to month. For an investor settling a new property in 2027 or later, the subdivision reforms are not a competing source of supply that arrives in time to soften the market. They are confirmation, from the government itself, that the shortage behind today's growth is real and not yet resolved.

Brisbane and the Gold Coast: Government Land Entering the Market

Queensland has introduced its Land Activation Program, which is designed to unlock and release government-owned land to private developers. The logic is straightforward. If undersupply is partly a land availability problem, releasing more land is one of the few direct levers the government has to pull.

This complements what Cotality's data already shows about Brisbane, where interstate migration and years of underbuilding have pushed resale profitability to the highest of any capital city. Brisbane dwelling values are currently at a record high, up 17.4 per cent over the past 12 months. A land release program does not fix that gap overnight. Land needs to be zoned, serviced, and built on, and developers need years to deliver completed homes. Investors buying into Queensland today are effectively buying ahead of a supply response that is only just getting underway.

Melbourne: Approvals Moving Faster, Supply Still Catching Up

Victoria introduced a Single Home Code in late 2025 to streamline the approval process for new homes on blocks under 300 square metres. It is a smaller, more targeted reform than Perth's or Queensland's, aimed at cutting red tape rather than releasing new land.

City of Melbourne projections show Central Melbourne needs a further 21,580 homes over the next 20 years to keep pace with demand. The current apartment pipeline is on track to deliver less than half of that. That gap is already showing up in performance. Vacancy across newly built Central Melbourne apartments fell to a low of 1.2 per cent in early 2026, and rental yields on new stock reached 5.2 per cent in the year to January, ahead of both Central Sydney and the Brisbane CBD. Strong overseas migration into the city is adding further support to that demand.

For investors, this points to a segment where the fundamentals line up well. A deep, long-dated shortfall in supply, paired with yields and vacancy rates that are already outperforming other major capitals, is exactly the setup that tends to reward buyers who get in ahead of the gap closing.

What This Means if You’re Buying Off-The-Plan

Every policy above shares the same shape. Governments have identified undersupply as a problem, and they are responding with planning and land release reforms. None of these reforms deliver a single new completed home immediately. Subdivision code changes take years to filter through. Land release programs take years to become finished streets. Approval reforms speed up applications, not construction timelines.

That gap between policy announcement and actual new supply is where an off-the-plan purchase sits. Buying now means securing a property before that supply response has caught up, in markets where governments themselves are acknowledging the shortfall is real and are moving, slowly, to close it.

iBuyNew specialises in helping investors navigate Australia's new property market, with access to quality off-the-plan stock, independent market insight, and end-to-end guidance from research through to settlement. If you're looking to buy ahead of a supply gap that governments themselves are still working to close, our team is ready to help you make a well-informed, strategically sound decision.

Book a call with an iBuyNew property specialist or call 1300 123 463.